Sample paper 2
Passage For Question 1 to 9
Recent years have brought minority-owned businesses in the United States unprecedented
opportunities-as well as new and significant risks. Civil rights activists have long argued that one of
the principal reasons why Blacks, Hispanics and the other minority groups have difficulty establishing
themselves in business is that they lack access to the sizable orders and subcontracts that are
generated by large companies. Now congress, in apparent agreement, has required by law that
businesses awarded federal contracts of more than $500,000 do their best to find minority
subcontractors and record their efforts to do so on forms field with the government. Indeed, some
federal and local agencies have gone so far as to set specific percentage goals for apportioning parts
of public works contracts to minority enterprises. Corporate response appears to have been
substantial. Accoring to figures collected in 1977, the total of corporate contracts with minority
business rose from $77 to $1. 1 billion in 1977. The projected total of corporate contracts with minority
business for the early 1980’s is estimated to be over $3 billion per year with no letup anticipated in the
next decade. Promising as it is for minority businesses, this increased patronage poses dangers for
them, too. First, minority firms risk expanding too fast and overextending themselves financially, since
most are small concerns and, unlike large businesses they often need to make substantial
investments in new plants, staff, equipment, and the like in order to perform work subcontracted to
them. If, there after, their subcontracts are for some reason reduced, such firms can face potentially
crippling fixed expenses. The world of corporate purchasing can be frustrating for small
entrepreneur’s who get requests for elaborate formal estimates and bids. Both consume valuable time
and resources and a small cmpany’s efforts must soon result in orders, or both the morale and the
financial health of the business will suffer. A second risk is that White-owned companies may-seek to
cash inon the increasing apportion-ments through formation of joint ventures with minority-owned
concerns, of course, in many instances there are legitimate reasons for joint ventures; clearly, white
and minority enterprises can team up to acquire business that neither could Third, a minority
enterprise that secures the business of one large corporate customer often runs the danger of
becoming
– and remaining dependent. Even in the best of circumstances, fierce competition from
larger, more established companies makes it difficult for small concerns to broaden their customer
bases; when such firms have nearly guaranteed orders from a single corporate benefactor, they may
truly have to struggle against complacency arising from their current success.
Question 1
The primary purpose of the passage is to
A. present a commonplace idea and its inaccuracies
B. describe a situation and its potential drawbacks
C. propose a temporary solution to a problem
D. analyze a frequent source to a problem
E. explore the implications of a findings.
Correct Answer : B
Question 2
The passage supplies information that would answer which of the following questions?
A. What federal agencies have set percentage goals for the use of minority owned businesses in
public works contracts?
B. To which governments agencies must businesses awarded federal contracts report their
efforts to find minority subcontractors?