Most economists in the United States seem captivated by spell of the free market. Consequently, nothing
seems good or normal that does not accord with the requirements of the free market.
A price that is determined by the seller or for that matter, established by anyone other than the aggregate
of consumers seems pernicious, accordingly, it requires a major act of will to think of price fixing (the
determination of prices by the seller) as both "normal" and having a valuable economic function. In fact,
price-fixing is normal in all industrialized societies because the industrial system itself provides, as an
effortless consequence of its own development, the price-fixing that requires, Modern industrial planning
requires and rewards great size. Hence a comparatively small number of large firms will be competing for
the same group of consumers. That each large firm will act with consideration of its own needs and thus
avoid selling its products for more than its competitors charge is commonly recognized by advocates of
free-markets economic theories. But each large firm will also act with full consideration of the needs that it
has in common with the other large firms competing for the same customers. Each large firm will thus
avoid significant price cutting, because price cutting would be prejudicial to the common interest in a
stable demand for products. Most economists do not see price-fixing when it occurs because they expect
it to be brought about by a number of explicit agreements among large firms; it is not.
More over those economists who argue that allowing the free market to operate without interference is the
most efficient method of establishing prices have not considered the economies of non socialist countries
other than the United States. These economies employ intentional price-fixing usually in an overt fashion.
Formal price fixing by cartel and informal price fixing by agreements covering the members of an industry
are common place. Were there something peculiarly efficient about the free market and inefficient about
price fixing, the countries that have avoided the first and used the second would have suffered drastically
in their economic development. There is no indication that they have.
Socialist industry also works within a frame work of controlled prices. In early 1970's, the Soviet Union
began to give firms and industries some of the flexibility in adjusting prices that a more informal evolution
has accorded the capitalist system. Economists in the United States have hailed the change as a return to
the free market. But Soviet firms are no more subject to prices established by free market over which they
exercise little influenced than are capitalist firms.
The primary purpose of the passage is to

• A. explain the origins of black holes, neutron stars, and white dwarfs.
• B. offer new explanations for the collapse of stars.
• C. describe the imbalance between radiation pressure and gravitational force.
• D. explain how the collapse of stars challenges accepted theories of physics.
• E. compare the structure of atoms with the structure of the solar system.

In an entrance test that is graded on the basis of English and general knowledge, the probability of a
randomly chosen student passing both the tests is 0.5 and the probability of passing neither is 0.1. If the
probability of passing the English test is 0.75, then what is the probability of passing the general
knowledge test?

• A. 11/20
• B. 13/20
• C. 1/20
• D. 3/5
• E. 5/13

The bank will definitely give us a loan, but the burnings question is, will they let us have as much as we
need?

• A. but the question burning is
• B. but the burned question is
• C. but the burning question is
• D. but the burnings question is
• E. but the burning questions is

AUTHORITARIAN: DISCIPLINE::

• A. infiltrator: purity
• B. glutton:abstinence
• C. heckler: sincerity
• D. pragmatist: utility
• E. polemicist: conciliation