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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. According to Friedman, what is one major cost of the extension of governmental welfare activities?
(a) Increased regulation of private organizations.
(b) Decline in private charitable activities.
(c) Higher taxes with low results.
(d) Lower productivity of labor.

2. According to Friedman, who benefits from licensure?
(a) Customers.
(b) Aspirants.
(c) Clients.
(d) Licensed practitioners.

3. Forming a list of who engages in what is known as ______.
(a) Licensing.
(b) Registration.
(c) Organizing.
(d) Listing.

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

5. What example does Friedman give for one argument for registration?
(a) Firearm registration.
(b) Tobacco registration.
(c) Alcohol registration.
(d) Sex offender registration.

Short Answer Questions

1. What is one method that governments have used to alter the distribution of income?

2. Friedman states that ______ is a generator of inequality.

3. What two professions does Friedman compare to support his claim on the harm it does when people are unable to find mutually acceptable contracts?

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

5. For Friedman, what is one major problem in interpreting the evidence on the distribution of income?

Short Essay Questions

1. Do you think doctors should be required to obtain a license?

2. Friedman accepts the reasoning that justifies "governmental action to alleviate poverty" (p. 191). What two issues must be addressed in order for this to happen?

3. Why is Friedman against fair employment laws?

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

5. What are the three sources of monopoly?

6. In Chapter 13, Friedman summarizes his examples. Which do you disagree with?

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

8. What does Friedman assert that capitalism has done for inequalities?

9. Where do you stand: are you on the liberal free market side or more on the government intervention side? Why?

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

(see the answer keys)

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