PASSGE 1
People weigh the relative costs and benefits of each
The most central assumption in economics is that human
beings are rational maximizers of their individual
satisfactions, and, in turn, respond to incentives. A rational
maximizer of personal satisfaction adjusts means to ends in
the most efficient way possible. It is important to realize
that economics, as understood here, is not restricted to
analysis of monetary issues; there are nonmonetary as well
as monetary satisfactions. Every potential satisfaction is
implicated in the calculus of economic satisfactions and
therefore can be investigated according to economic or
means-end rationality and the trade-off of costs and
benefits. Normally what is aimed at through economic
reasoning is the improvement of efficiency.
A more efficient allocation is one that increases the net
value of resources. Efficiency in the allocation of resources
is distinguished from equity, which is concerned with
justice in the distribution of wealth. Because some people
value specific goods higher or lower than others, economic
efficiency can often be raised through voluntary transfers
of goods. The most common example of a transfer
promoting efficiency is that of a freely entered into
contractual relationship. Because one party to the
transaction values money more than the item owned, and
the other values the item owned more than the asking
price, the exchange produces a net gain in economic goods.
Each person ends up better off than before. Some
economists have gone so far as to argue that such a
contractual exchange is morally optimal because it works
within both Kantian and utilitarian theories of morality.
They argue that it works with Kantian theories because a
contract is thought to represent a good example of
interaction between free and rational agents. It works with
utilitarianism because the idea of wealth maximization
intuitively translates into more utility.
Economists have a variety of terms to describe possible
outcomes of economic exchanges. For instance Pareto
optimality is defined as a point where resources are
allocated such that no one is willing to trade further. Pareto
optimality is the eventual endpoint of a series of Pareto
superior moves. A Pareto superior change makes at least
one person better off without making anyone worse off.
Because no one is worse off after the trade there are no
losers in Pareto improvements, although there may be
many different Pareto optimal endpoints. Furthermore,
economists have developed the concept of Kaldor-Hicks
efficiency to compensate for obstacles to freely contracted
exchanges. Kaldor-Hicks efficiency, or potential Pareto
superiority, results when the overall economic gains
outweigh the losses. In other words, the gains in economic
efficiency are large enough that the winners could, if they
had to, compensate the losers in the new allocation of
goods and still remain better off.
1) “Normally what is aimed at through economic reasoning
is the improvement of efficiency.” [Paragraph 1] What
does ‘economic reasoning’ mean?
a. When humans are presented with various options
under the conditions of scarcity, they would choose
the option that maximizes their individual satisfaction.
b.
alternative when faced with a choice and then choose
the one that provides them with the greatest anticipated
benefits.
c. When humans are presented with various options, their
preferences do not invalidate the economic analysis of
alternatives, even if their choice is irrational.
d. Because humans are emotional and easily distracted
beings, they make decisions that are not in their self-
interest.
2) All these are examples of ‘efficiency in the allocation of
resources’ EXCEPT:
a. Seats are reserved for economically backward classes in
government jobs.
b. Most of the inventory in stock in a toy shop is a toy that
is in the greatest demand.
c. An expressway that has been designed to give the
maximum mileage per litre of fuel.
d. Spare capacity of a manufacturing unit is leased to a
competitor at a reasonable rent.
3) “…contractual exchange is morally optimal” in
utilitarianism [paragraph 2] because…
a. It considers subjugation of one’s interests in order to
fulfill another’s, as morally superior.
b. The exchanged economic good is considered ‘morally’
appropriate by the beneficiary as well as by the
benefactor.
c. It places the locus of right and wrong solely on the
outcomes.
d. The exchange happens voluntarily between two ‘free’
and ‘rational’ agents.
4)According to the passage, Kaldor-Hicks efficiency…
a. produces more benefits than costs.
b. is at all times a true pareto improvement.
c. is the eventual endpoint of pareto superior moves.
d. ensures that no one person is better off than others.
5)Which of the following, if true, would undermine the
passage’s main argument?
a. People evaluate the costs and benefits of different
alternatives and choose the best to maximize their
happiness.
b. When incentives change, people's behaviour changes
in unpredictable ways.
c. Human beings possess the innate wisdom to reject
factors that undermine optimal economic efficiency.
d. People recognize that an important type of cost is
opportunity cost: the next best alternative that people
give up when they make a choice.
passage 2
Laypersons and academics alike have largely viewed
creativity as a positive force, a notion challenged by the
philosopher and educator Robert McLaren of California
State University, Fullerton in 1993. McLaren proposed that
creativity had a dark side. As time went on, newer concepts
–negative and malevolent creativity – included conceiving
original ways to cheat on tests or doing purposeful harm to
others, for instance, innovating new ways to execute
terrorist attacks. 7) The phrase, “Sure; but this can become a slippery slope”
We looked at the problem through what psychologists call (Paragraph 4) implies,
the four Ps of creativity – person (the individual engaging a. If one rationalizes the negative side of creativity it
in the act), process (the strategy employed), product (the could be potentially harmful.
creative outcome itself), and press (the situation at hand.) b. To explain how one’s creativity can slip down if
After aseries of five experiments, we concluded that one begins to become negative.
negative creativity (product) is most likely to be displayed c. A person’s intelligence declines if they harness
by highly intelligent persons, with subclinical negative negative creativity.
personality traits such as psychopathy, especially in open- d. The dark side of creativity declines over time.
ended situations where deception can succeed. When 8) Based on the passage, all of the following are true about
creative people had a negative, morally questionable goal advertising EXCEPT:
up-front, they were also more likely to lie. a. Dark art has always been a part of innovative
We confirmed the contention that the dark side of advertising campaigns.
creativity exists, and is one that it’s important to b. In advertising, products are often pitted against
acknowledge and understand. People can get hurt in each other.
surprising and original ways by practitioners of this dark c. Some advertisements are aimed at deriding an
craft. And, just as important, an entire set of misbehaviours indecisive customer.
with the potential to help us learn more about human d. Advertising employs the side of creativity to
creativity may be going unnoticed and ignored. increase profits.
What if, after knowing that the dark side exists, we 9) In the second paragraph, the author uses “problem” to
consciously try to use it? Is that really always bad? Perhaps refer to the
we won’t lie to get into a theatre – but what if a surprise a. viewing of creativity without a social or moral
birthday party for a friend requires sly and crafty planning, lens.
coordination, and a great deal of deception and b. innovating new ways to execute terrorist attacks.
misdirection? Can we then channel our dark energies to c. high levels of intelligence in negatively creative
bring joy to others? Sure; but this can become a slippery persons.
slope. If the goal switches to planning a surprise theft, the d. existence of a dark side to creativity.
same skills can harm others.
The dark art has been here all along. Just consider some
innovative advertising campaigns deriding a competitor’s
product in favour of one’s own: the cola wars, the burger
wars and the coffee wars are all notorious for hinting at the
competition’s lower quality, with direct or indirect
references. Is this dark? Sure; it’s an underhand way to get
through to your undecided consumer. Is it creative? Of
course! Should it be used? Definitely – it’s meant to
increase your profit in a competitive world.
Dark humour should take a bow, as well. To be able to
come up with a dead-baby joke, one needs not only a
punch line, but a macabre one. To be able to laugh at such
a joke, one needs to have a strong stomach and keep
moralistic thinking at bay. The now infamous comedian
Louis CK uses black comedy in his acts as well as his
namesake television show. His work was disturbing yet
hilarious – until he went too far, joking about high-school
students massacred with guns. One can argue that dark
humour has the potential to psychologically harm others –
but dark jokes made with intent to elicit laughter highlight
the importance of distinguishing means and ends in
creative pursuits.

6)What is the central argument presented by the author in

the passage?
a. Without a dark side a person’s creativity goes to
waste.
b. Negative personality traits are markers of a
person’s creativity.
c. Dark humour can be very harmful.
d. There is a dark side to creativity that is negative
and malevolent.
Passage 3
What does it take to be a good person? What makes
someone a good doctor, therapist or parent? What guides
policy-makers to make wise and moral decisions? Many
believe that empathy — the capacity to experience the
feelings of others, and particularly others’ suffering — is
essential to all of these roles. I argue that this is a mistake,
often a tragic one.
Empathy acts like a spotlight, focusing one's attention on a
single individual in the here and now. This can have
positive effects, but it can also lead to short-sighted and
unfair moral actions. And it is subject to bias — both
laboratory studies and anecdotal experiences show that
empathy flows most for those who look like us, who are
attractive and who are non-threatening and familiar.
When we appreciate that skin color does not determine
who we should care about, for example, or that a crisis
such as climate change has great significance — even
though it is an abstract threat — we are transcending
empathy. A good policy maker makes decisions using
reason, aspiring toward the sort of fairness and impartiality
empathy doesn't provide. Empathy isn’t just a reflex, of
course. We can choose to empathize and stir empathy for
others. But this flexibility can be a curse. Our empathy can
be exploited by others, as when cynical politicians tell
stories of victims of rape or assault and use our empathy
for these victims to stoke hatred against vulnerable groups,
such as undocumented immigrants.
For those in the helping professions, compassion and
understanding are critically important. But not empathy —
feeling the suffering of others too acutely leads to
exhaustion, burnout and ineffective work. No good
therapist is awash with anxiety when working with an
anxious patient. Some distance is required. The essayist
Leslie Jamison has a great description of this, in writing
about a good doctor who helped her: “His calmness didn’t
make me feel abandoned, it made me feel secure," she
wrote. "I wanted to look at him and see the opposite of my
fear, not its echo.” Or consider a parent dealing with a
teenager who is panicked because she left her homework to
the last minute. It’s hardly good parenting to panic along
with her. Good parents care for their children and
understand them, but don’t necessarily absorb their
suffering.
Rationality alone isn’t enough to be a good person; you
also need some sort of motivation. But compassion —
caring for others without feeling their pain — does the
trick quite nicely. Empathy and compassion are distinct:
Recent neuroscience studies, including some fascinating
work on the power of meditation, show that compassion is
distinct from empathy, with all its benefits and few of its
costs. Many of life’s deepest pleasures, such as
engagement with novels, movies and television, require
empathic connection. Empathy has its place. But when it
comes to being a good person, there are better alternatives.
10.According to the author, wise and moral decisions are
guided by …
a. Empathy, rationality and compassion.
b. Rationality, guided by a genuine motivational
factor.
c. Rationality, fairness and impartiality.
d. Both empathy and compassion in equal measure.
11 )Which of the following is TRUE about empathy?
a. Decisions based on empathy are potentially
prejudicial to others and ill-considered.
b. Empathy is an involuntary emotion that enables
one to put oneself in another’s shoes.
c. Empathy forms an irreplaceable part of helping
professions like nursing and counselling.
d. Only when empathy is combined with rationality
can we lend wise help to those in need.
12)Which of the following best describes what the passage
is trying to convey?
a. Reason, rather than empathy, should guide action
as it aspires to fairness and impartiality.
b. The terms empathy and compassion are often
incorrectly used interchangeably.
c. It is not just empathy that embodies humaneness,
but also compassion and reason.
d. There are many alternatives available to shaping
yourself into a better fellow human.
13)According to the author, when do we “transcend
empathy” (Paragraph 3)?
a. When we ‘feel with' another person, identify with
them and sense the abstract threats they're
experiencing.
b. When we give up our sense of individuality and
identify with those belonging to other groups,
gender, tribes, nations, races or classes.
c. When distinctions of ethnicity, religion and other
identity badges determine our ability to experience
the suffering of others.
d. When we pay attention to the emotions of people
who differ from us in terms of ethnicity,
nationality and the like.
14) Which of the following, if true, would make the
author’s thesis less supportable?
a. Many people believe that empathy — in the sense
of feeling others' feelings — is central to being a
good person.
b. Empathy includes not only emotion-sharing but
sharing, thinking about, and caring for others’
suffering.
c. When people believe that empathy is under their
control, they start identifying with the emotions of
people who are different from them.
d. When people rely on reason to guide morality they
have a tendency to confirm what they already
believe.
Passage 4
The passage below is accompanied by a set of 5 questions.
Choose the best answer for each question.
BREXIT is such an all-consuming process for the British
—at once a drama, a muddle and a mess—that it is easy to
forget that it is part of something bigger: a crisis of
liberalism in the west. A growing number of countries have
had their own equivalents of Brexit: ...Donald Trump, the
populist government in Italy; the revolt in Spain, the rise of
populist authoritarians in Russia, Hungary, Poland and, to
some extent, India.
It’s worth taking a break from the ins-and-outs of Brexit to
look at the bigger picture, partly because the bigger picture
helps us to understand Brexit better and partly because…
we need to understand the causes of popular discontent.
Why is liberalism in such a mess? And how can (we) get
out of it? But … what does this slippery word mean?
There are two misleading definitions of “liberalism”. The
first is the American idea that liberalism means left-wing
progressivism. This definition was foisted on the American
left by Republicans in the 1970s: the likes of Richard
Nixon and George Bush senior liked to talk about
“limousine liberals” who advocated “progressive” policies
on crime and social integration so long as they could
protect themselves from the consequences of those
policies, e.g., by sending their children to private schools
and living in gated communities. Since then some
progressives have worn the badge with pride. But
American progressivism, particularly in its current
iteration, with its growing obsession with group rights and
group identities, is incompatible with the liberalism as I’m
going to use it. The second is the classical idea that
liberalism means small-government libertarianism.
I’m going to use liberalism in the British sense: to mean a
philosophy that began as small-government libertarianism
but has acquired many new meanings over the years.
Liberalism was inspired by the three great revolutions of
the late 18th century—the American Revolution, the
French Revolution and the Industrial Revolution. It began
as a small-government philosophy…, but later made its
peace with bigger government. Liberalism is a pragmatic
philosophy that is constantly evolving. The central idea of
liberalism is the primacy of the individual rather than the
collective. But in his brilliant history, “Liberalism: the Life
of an Idea”, Edmund Fawcett makes clear that liberalism
involves four other ideas: the inescapability of conflict,
distrust of power, faith in progress, and civic respect.
Discussions of the crisis of liberalism usually emphasize
practical things. The global financial crisis (2008)
destroyed people’s faith in both the wisdom of technocrats
and the fairness of the system. Liberal icons such as Tony
Blair and Barack Obama over-reached—Mr Blair in Iraq
and Mr Obama in the culture wars. A magic circle of
companies and entrepreneurs piled up too much wealth. I
want to suggest a more wide-ranging explanation that
focuses on the life of the mind: liberalism as a philosophy
has been captured by a technocratic-managerial-
cosmopolitan elite. A creed that started off as a critique of
the existing power structure—that, indeed, has suspicion of
concentrations of power at the molten core of its
philosophy—is being misused as a tool by one of the most
powerful elites in history. Liberalism has, in effect, been
turned on its head and become the opposite of what it was
when it started out. It is time to put it back on its feet.
15) According to the author, which of the following is the
“crisis of liberalism in the west”?
a. The hypocrisy of the left wing progressivism
obsessed with group rights and identities.
b. The failure of liberalism to incorporate the four
ideas of Edmund Fawcett.
c. The loss of faith in liberalism owing to the failure
of technocrats and world leaders.
d. The capture of liberalism by technocratic-
managerial-cosmopolitan elite.
16) The term “limousine liberals” [Paragraph 3] is used:
a. as a deprecatory term to illustrate the hypocritical
behavior of the upper class.
b. as the ideal products of left wing progressivism in
America.
c. as a pejorative term to describe the American
liberals of the Right wing.
d. as a description of the elite egalitarians who
believed in mass education.
17)Which of the following governments will be
conforming to the author’s concept of liberalism?
a. A small government which effectively guides
policy and regulates private sector, and allows for
legitimate checks on individual freedom.
b. A government that may be large but with minimal
involvement in public policy and private sector,
and which allows maximum individual freedom.
c. A small government with maximum governance.
d. Self-governed societies based on voluntary and
cooperative institutions, and marked by the
absence of a government
18)According to the author, all of the following undermine
‘liberalism’ EXCEPT:
a. The rise of populist authoritarian governments in
several countries in the world.
b. The flexibility of liberalism in responding to social
and political challenges.
c. The capture of liberalism by the elite as a tool to
uphold its own power.
d. The concentration of wealth in a miniscule
percentage of the population.
19) The main objective of the passage is:
a. To understand why liberalism is currently in a
mess, and to examine the causes of rising popular
discontent.
b. To try to understand the bigger picture behind
Brexit, and why Brexit is such an all-consuming
drama and a mess.
c. To examine the recent rise of populist
authoritarianism in the West and in a growing
number of countries in the world.
d. To present the perspective on how liberalism is no
longer what it was meant to be and to highlight the
need to reclaim it.