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Questions 1 and 2 are based on the following reading passage.

(A part of one sentence is shown underlined and in boldface for reference in answering question 18, and a word is shown underlined and in boldface for reference in answering question 19.)
The most plausible justification for higher taxes on automobile
fuel is that fuel consumption harms the environment and thus adds
to the costs of traffic congestion. But the fact that burning fuel
creates these “negative externalities” does not imply that no tax on
5 fuel could ever be too high. Economics is precise about the tax that 
should, in principle, be levied to deal with negative externalities:
the tax on a liter of fuel should be equal to the harm caused by
using a liter of fuel. If the tax is more than that, its costs (including
the inconvenience to those who would rather have used their cars)
10 will exceed its benefits (including any reduction in congestion and 
pollution).

1. Select and indicate the best answer from among the five answer Choices:

Which of the following best characterizes the function of the underlined and boldfaced partial sentence in lines 7-8 of the passage?
A) It restates a point made earlier in the passage.
B) It provides the evidence on which a theory is based.
C) It presents a specific application of a general principle.
D) It summarizes a justification with which the author disagrees.
E) It suggests that the benefits of a particular strategy have been overestimated.

2. Select and indicate the best answer from among the five answer choices:
The word “exceed” appears underlined and boldfaced in line 10 of the passage. In the context in which it appears, “exceed” most nearly means
A) outstrip
B) magnify
C) delimit
D) offset
E) Supplant

Answer: C

Explanation:
1. Part of sentence3 states a general principle in Economics. The underlined part is a specific application of this general principle. Hence, Choice C is correct.
2. No sentence in the passage has repeated what the underlined part says. Hence, Choice A is incorrect.
3. The passage doesn’t provide any evidence for the correctness of the taxation theory. Hence, Option B is incorrect.
4. The author does not disagree with the justification. He only modifies it. Hence, Option D is incorrect.
5. The underlined part does not say that benefits have been overestimated. Hence, Option E is incorrect.

*****************************************************************************************

Answer: A

Explanation: 
1. In the context of the passage the word ‘exceed’ in the passage clearly expresses the meaning ‘cross’ or ‘outstrip’ or ‘surpass’. Hence, the right answer choice is A. 

2. ‘Magnify’ gives the meaning ‘increase the size’. ‘Delimit’ gives the meaning ‘remove the limits’. ‘Offset’ gives the meaning ‘cancel’. ‘Supplant’ gives the meaning ‘replace’. Hence, Choices B, C, D, and E are incorrect.