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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Most of the ICC staff came from the:
(a) railroad industry
(b) were laymen
(c) legislature
(d) stock market

2. In Great Britain:
(a) workers represent themselves
(b) most labor unions represent workers of nationalized industry
(c) there are no labor unions
(d) labor unions are weak

3. One way of restricting entry to an occupation or profession is through:
(a) laws
(b) agreement
(c) rules
(d) licensure

4. The Environmental Protection Agency was formed in:
(a) 1970
(b) 1975
(c) 1966
(d) 1972

5. As a result of inflation, there is:
(a) no change in prices
(b) decrease in prices
(c) an increase in prices
(d) more goods and services to buy

6. The growth of bureaucracy leads to:
(a) faster resolution of problems
(b) greater efficiency
(c) lower costs
(d) a conflict between desired objectives

7. New drugs cannot be marketed:
(a) their profitability is proven
(b) the drug company can produce them cheaply
(c) until the drug manufacturer approves them
(d) unless the FDA determines they are safe and effective

8. Friedman favors:
(a) expanding the scope of government
(b) bigger government
(c) limiting the growth of government
(d) more government controls

9. According to Friedman, who is most likely to produce a shoddy product?
(a) both government and private enterprise
(b) private enterprise
(c) consumers won't accept a shoddy product
(d) government

10. To improve their position, railroads engaged in:
(a) promotions
(b) good service
(c) rate fixing
(d) intensive advertising

11. According to Friedman, the way to cure inflation is to:
(a) force consumers to increase their savings
(b) promote spending policies
(c) reduce the rate of monetary growth
(d) limit the amount of goods and services available for sale

12. Objections to the school voucher plan include all but the following:
(a) there would be an increase in total costs of education
(b) there might be a constitutional church-state issue
(c) there is the possibility of fraud
(d) it would decrease the quality of education

13. Attendance at school became mandatory in all states in:
(a) 1923
(b) 1875
(c) 1900
(d) 1918

14. As a result of inflation:
(a) consumers feel richer
(b) one dollar buys fewer goods and services
(c) one dollar buys more goods and services
(d) consumers buy more goods and services

15. The first schools were:
(a) private with mandatory attendance
(b) `public with mandatory attendance
(c) private with voluntary attendance
(d) public with voluntary attendance

Short Answer Questions

1. Which of the following is not a way of rationing high paying jobs:

2. The purpose of the Consumer Products Safety Commission is to:

3. At the time the book was written, how many workers belonged to unions?

4. The ideas of human freedom and economic freedom are best exemplified in:

5. Washington D.C.:

(see the answer keys)

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