ACT Reading Practice Test 100: SOCIAL SCIENCE

DIRECTIONS: Each passage is followed by several questions. After reading a passage, choose the best answer to each question and fill in the corresponding oval on your answer document. You may refer to the passages as often as necessary.

SOCIAL SCIENCE: This passage is adapted from the article "Management Secrets of the Grateful Dead" by Joshua Green (©2010 by The Atlantic Monthly Group).

Since the 1970s, the Grateful Dead has invited
academic examination. Musicologists showed interest,
although the band's sprawling repertoire and tendency
to improvise posed a significant challenge. Engineers
5studied the band's sophisticated sound system, radical
at the time but widely emulated today. Other disciplines
have also found relevant elements of the band's history
and cultural impact to be worth examining.

Oddly enough, the Dead's influence on the busi-
10ness world may turn out to be a significant part of its
legacy. Without intending to-while intending, in fact,
to do just the opposite-the band pioneered ideas and
practices that were subsequently embraced by corporate
America. One was to focus intensely on its most loyal
15fans. It established a telephone hotline to alert them to
its touring schedule ahead of any public announcement,
reserved for them some of the best seats in the house,
and capped the price of tickets, which the band distrib-
uted through its own mail-order house. If you lived in
20New York and wanted to see a show in Seattle, you
didn't have to travel there to get tickets-and you could
get really good tickets, without even camping out. "The
Dead were masters of creating and delivering superior
customer value," Barry Barnes, a business professor at
25Nova Southeastern University, in Florida, told me.
Treating customers well may sound like common sense.
But it represented a break from the top-down ethos of
many organizations in the 1960s and 1970s. Only in the
1980s, faced with competition from Japan, did Ameri-
30can CEOs and management theorists widely adopt a
customer-first orientation.

As Barnes and other scholars note, the musicians
who constituted the Dead were anything but naive
about their business. They incorporated early on, and
35established a board of directors (with a rotating CEO
position) consisting of the band, road crew, and other
members of the Dead organization. They founded a
profitable merchandising division and, peace and love
notwithstanding, did not hesitate to sue those who vlo-
40lated their copyrights. But they weren't greedy, and
they adapted well. They famously permitted fans to
tape their shows, ceding a major revenue source in
potential record sales. According to Barnes, the deci-
sion was not entirely selfless: it reflected a shrewd
45assessment that tape sharing would widen their audi-
ence, a ban would be unenforceable, and anyone
inclined to tape a show would probably spend money
elsewhere, such as on merchandise or tickets. The Dead
became one of the most profitable bands of all time.

50It's precisely this flexibility that Barnes believes
holds the greatest lesson for business-he calls it
"strategic improvisation." It isn't hard to spot a few of
its recent applications. Giving something away and
earning money on the periphery is becoming the blue-
55print for more and more companies doing business on
the Internet. Today, everybody is intensely interested in
understanding how communities form across distances,
because that's what happens online.

Much of the talk about "Internet business models"
60presupposes that they are blindingly new and different.
But the connection between the Internet and the Dead's
business model was made years ago by the band's lyri-
cist, John Perry Barlow, who became an Internet guru.
In 1994, Barlow posited that in the information econ-
65omy, "the best way to raise demand for your product is
to give it away." As Barlow explained to me: "What
people today are beginning to realize is what became
obvious to us back then-the important correlation is
the one between familiarity and value, not scarcity and
70value. Adam Smith taught that the scarcer you make
something, the more valuable it becomes. In the physi-
cal world, that works beautifully. But we couldn't regu-
late [taping at] our shows, and you can't online. The
Internet doesn't behave that way. But here's the thing
75if I give my song away to 20 people, and they give it to
20 people, pretty soon everybody knows me, and my
value as a creator is dramatically enhanced. That was
the value proposition with the Dead." The Dead thrived
for decades, in good times and bad. In a recession,
80Barnes says, strategic improvisation is more important
than ever. "If you 're going to survive an economic
downturn, you better be able to turn on a dime." he
says. "The Dead were exemplars." It can be only a
matter of time until Management Secrets of the Grateful
85Dead or some similar title is flying off the shelves of
airport bookstores everywhere.

1. One main idea of the passage is that the Grateful Dead:

A. used an innovative, recession-proof approach to business that other companies have learned from.
B. wouldn't have become financially successful if they hadn't used the Internet for marketing.
C. displayed a talent for songwriting that few other bands have matched.
D. organized the band in a way that mimicked the structure of Japanese companies.

2. The passage most strongly implies that one way Grate-ful Dead fans are similar to some Internet users is that the fans:

F. were willing to pay more for quality merchandise.
G. displayed a lack of generosity toward strangers.
H. formed communities across distances.
J. had diverse musical tastes

3. The author includes quotations from Barnes and Barlow most likely in order to:

A. illustrate that business leaders have implemented the Grateful Dead's methods.
B. provide expert support for the idea that the Grate-ful Dead used savvy business practices.
C. suggest that scholars find the band's history more instructive than that of other bands.
D. verify that the Grateful Dead were extremely naive about running a business.

4. The passage indicates that one component of the Grateful Dead's business model was that the band:

F. increased its fan base by giving away tickets and merchandise at performances.
G. discovered that a fan given something for free would buy other merchandise.
H. appointed one member as CEO to streamline decision making.
J. resisted significant change because being consis-tent produced financial stability.

5. What connection does Barlow make between the Grate-ful Dead's business model and Smith's teachings?

A. delaying the release of its music, the Grateful Dead illustrated Smith's teaching that scarcity decreases profits.
B. By successfully marketing its music on the Inter-net, the Grateful Dead disproved Smith's teaching that new markets should be entered cautiously.
C. By running its own company, the Grateful Dead exemplified Smith's teaching that controlling the image of a brand adds value.
D. By choosing to allow fans to share copies of its songs, the Grateful Dead acted counter to Smith's teaching that scarcity increases value.

6. The main point of the first paragraph is that various scholars have studied the Grateful Dead because:

F. few bands have produced such an extensive cata-log of music.
G. the band's fans found ways to make the band rele-vant to their own careers.
H. the band displayed rare qualities in a number of different areas.
J. the band's traditional approach to music made its members attractive subjects

7. As it is used in line 5, the word radical most nearly means:

A. dangerous.
B. revolutionary
C. characteristic
D. awesome

8. Which of the following questions is directly answered by the passage?

F. What aspect of the Grateful Dead's music most appeals to fans?
G. How did the Grateful Dead maintain contact with its fans?
H. Which businesses decided to ignore the Grateful Dead's strategies?
J. Why haven't more economists studied the Grateful Dead's success?.

9. The passage indicates that the Grateful Dead "were masters of creating and delivering superior customer value" (lines 23-24) in part because they:

A. reserved some of the best seats for loyal fans and capped the price of tickets.
B. copied methods displayed by successful Japanese corporations.
C. disguised but still used the top-down organiza-tional strategy of many firms.
D. provided travel assistance for fans to see shows far from home.

10. According to the passage, American CEOs revised their approach to customers in the 1980s in response to:

F. shareholder desire for reorganization.
G. incorporation by smaller, faster businesses.
H. demand for better value from customers.
J. increased competition from Japan