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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. Labor unions are referred to as ______.
(a) Monopoly in labor.
(b) Produced monopoly.
(c) Monopoly in government.
(d) Monopoly in industry.

2. Who does Friedman believe maintains the system of licensure?
(a) Federal government.
(b) Local unions.
(c) Licensed members of each field.
(d) Licensure review board.

3. According to Friedman, a liberal will welcome measures that promote what?
(a) Wealth and freedom.
(b) Freedom and equality.
(c) Elimination of poverty.
(d) Power and politics.

4. What term describes the deliberate setting of prices through an agreement by firms?
(a) Collusion.
(b) Free market.
(c) Labor unions.
(d) Monopoly.

5. One threat Friedman believes to the preservation and expansion of freedom is ______.
(a) The Kremlin.
(b) An uneducated workforce.
(c) Cuba.
(d) Economic uncertainties.

Short Answer Questions

1. What effect has Friedman observed that public housing has had on juvenile delinquency?

2. What one argument for OASI can be justified for Friedman?

3. What is one example Friedman uses to demonstrate his point on monopoly in industry?

4. According to Friedman, what is one unknown negative effect of farm subsidies?

5. According to Friedman, Social security measures were enacted to make receipt of assistance a matter of ______.

Short Essay Questions

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

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

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

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

5. What does Friedman believe are the effects of minimum wage laws?

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

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

8. What are the three sources of monopoly?

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

10. What are the three forms of control discussed by Friedman in Chapter 9, Occupational Licensure?

(see the answer keys)

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