PASSAGE 6 Let s Have a Little Cooperation Please Cia Andina do Triconos (CATSA), a Bolivian joint venture of the U.S. Dresser Industries and local investors, which and based its investment _____(1)_____ an allocation under the metalworking program, closed its doors after _____(2)____ to penetrate the Andean market after more than two years in operation. The prospect of _____(3)_____ access to the Andean market, plus protection provided by a 55 percent "ad valorem" common outer tariff on bits sourced from outside the bloc, made the sales outlook seem _____(4)_____. However, CATSA s "monopoly" position in Ancom proved specious. _____(5)_____ the plant went on stream in 1974, the company was never able to export a single drill bit to the Andean market. and its local sales were _____(6)_____ a state-owned petroleum company. This market was clearly _____(7)_____, since the operation had been based on exporting the bulk of the plant s 200-unit-per-month capacity to the Andean area. CATSA could not penetrate the Ancom market for several reasons: Although Ancom _____(8)_____ a 55-percent common outer tariff on third-country imports, some Ancom countries had previously _____(9)_____ LAFTA (Latin American Free Trade Association) tariff concessions, which take precedence over the Ancom tariffs. Ancom members simply did not _____(10)_____ the spirit of the metalworking agreement. After the installation of the CATSA facility, plants producing tricone bits _____(11)_____ in Peru and Venezuela. Under the metalworking program, participating _____(12)_____ were committed to prohibiting new foreign investment in allocations of other Ancom countries. But on the question of new investment by local industry, the obligation was only not to encourage it, with no requirement to prevent it. _____(13)_____ Venezuela, it has no commitment to limit local production or to honor the outer tariff, because it was not yet a member of Ancom when the metalworking agreement was signed and was thus not a _____(14)_____ to the pact. Also, according to Bolivia, Colombia and Ecuador employed _____(15)_____ obstacles to avoid applying the common outer tariff. The withdrawal of Chile from Ancom cost Bolivia a lucrative potential market too. 1. A) in B) to C) under D) on 2. A) fail B) to fail C) failing D) succeeding 3. A) no duty B) no-duty C) duty-bound D) duty-free 4. A) good B) well C) bad D) badly 5. A) So B) Although C) But D) Therefore 6. A) confined to B) confined in C) expanded to D) exported to 7. A) big enough B) sufficient C) too big D) insufficient 8. A) has got B) got C) has imposed D) has imposed on 9. A) admitted B) admitting C) granting D) granted 10. A) learn B) honor C) take D) give 11. A) are put B) are established C) were set up D) had set up 12. A) member government B) members government C) member governments D) members governments 13. A) In case of B) In the case of C) In case D) On case 14. A) party B) member C) person D) partner 15. A) a series of B) a great deal of C) a large amount of D) a great number KEY:DCDAB ADCDB CCBAA PASSAGE 7 People Express People Express, founded in April 1981, grew rapidly on the basis of low fares and no-frills service. It soon became a leading airline and __1__ changed the industry as firms constantly engaged in price wars to lure passengers. Then, People Express bubble __2__ because it overexpanded, consumer complaints mounted and other airlines matched its fares on popular routes. In 1986, People Express __3__ hundreds of millions of dollars and was forced to sell out to Texas Air, the owner of Continental and Eastern Airlines. In early 1987, Texas Air __4__ People Express into its Continental division and industry observers believed __5__ the costly fare wars would be ended. They could not have been more wrong. To stimulate business for its __6__ continental Airlines, Texas Air instituted a new low fare category __7__ MaxSaver. The fare offered prices that were up to 40 per cent lower than "supersaver" rates offered __8__ all airlines. For example, the round-trip MaxSaver fare from New York to Houston was $70. The MaxSaver fares were immediately matched by all major airlines, __9__ feared losing business. While MaxSaver rates were low, they also had restrictions. Tickets could not be __10__ or flight times modified after purchase. Passengers would have to stay over either a Saturday or Sunday. Reservations had to be made at least two days __11__, and there were limited seats available. Three weeks after MaxSaver rates were __12__, American Airlines announced plans to raise its discount fares and require 30-day __13__ purchasing for its lowest fares. It felt it could not continue at the rates in effect. However, just 10 days __14__, Ameriacn Airlines had to revise its plan. Texas Air refused to abandon the MaxSaver fare. it even extended the program into the busy summer season. Competitors went along and the price war raged on, __15__ an executive s comment that "nobody s cost structure can survive MaxSavers." 1. A) little B) slowly C) quick D) radically 2. A) burst B) explode C) opened D) disappeared 3. A) gained B) made C) lost D) disappeared 4. A) emerged B) merged C) has combined D) mixed 5. A) what B) which C) where D) that 6. A) expand B) to extend C) expanded D) extended 7. A) called B) calling C)to call D) calling on 8. A) to B) for C) with D) by 9. A) what B) that C) which D) this 10. A) put off B) canceling C) destroyed D) canceled 11. A) before B) in advance C) ahead of D) later 12. A) introduced B) brought in C) taken in D) adapted 13. A) advanced B) before C) ahead D) prior to 14. A) lately B) later C) late D) latter 15. A) despite of B) despite C) in spite D) although KEY: DACBD CADCD BAABB