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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What is one example of a government supported monopoly?
(a) The auto industry.
(b) The postal service.
(c) The coal industry.
(d) The sugar cane industry.

2. Friedman hypothesizes that there has been a change in discrimination along with the rise of capitalism because ______.
(a) There has been an increase in the population of skilled workers.
(b) Religion has argued equality on moral grounds.
(c) Contract arrangements replaced status as a source of wealth.
(d) Greed has overtaken all ethical values.

3. How many problems with monopolies does Friedman describe?
(a) Four.
(b) Three.
(c) Two.
(d) One.

4. Friedman would agree that racism is ______.
(a) Unavoidable.
(b) Curable.
(c) Expensive.
(d) Fixable with government intervention.

5. What is one argument Friedman gives for public housing?
(a) The law of supply effect.
(b) The law of demand effect.
(c) The paternalism effect.
(d) The neighborhood effect.

Short Answer Questions

1. What example does Friedman use to demonstrate his views on employment practices?

2. According to Friedman, a liberal will welcome measures that promote what?

3. What effect has Friedman observed that minimum wage laws have had on poverty?

4. Labor unions are referred to as ______.

5. Regarding certification, what does Friedman stress increases sales?

Short Essay Questions

1. What are two problems with monopolies for the liberal?

2. What does Friedman believe are the effects of farm price supports?

3. What is Friedman's recommendation regarding an income tax?

4. What is the progressive income tax?

5. What are the three sources of monopoly?

6. Do you think people should be forced to participate in social security?

7. According to Friedman, do monopolies have any sort of "social responsibility"?

8. What are the three primary forms of monopoly?

9. In Chapter 13, Friedman summarizes his examples. Which do you agree with?

10. What example does Friedman use to illustrate his point about direct cash payments to those below a certain income level?

(see the answer keys)

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