Find all School-related info fast with the new School-Specific MBA Forum

 It is currently 25 Aug 2016, 01:28

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# A new technique for extracting residues of oil from existing

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 997
Location: Singapore
Followers: 20

Kudos [?]: 691 [1] , given: 36

A new technique for extracting residues of oil from existing [#permalink]

### Show Tags

18 Jun 2010, 11:17
1
This post received
KUDOS
3
This post was
BOOKMARKED
00:00

Difficulty:

(N/A)

Question Stats:

44% (03:01) correct 56% (01:43) wrong based on 82 sessions

### HideShow timer Statistics

A new technique for extracting residues of oil from existing oil wells by using lignins, a by-product of papermaking, is profitable provided that oil prices are over 20 dollars a barrel. Since oil prices are rising, investors looking for companies with prospects for rapid growth in profits would be wise to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity.

Which of the following, if true, most seriously weakens the argument above?
(A) A small quantity of lignins are currently sold by paper manufacturers to chemical companies, but most of the lignins produced are burnt as waste.
(B) The 20-dollar-a-barrel oil price as a threshold of profitability for using lignins allows for the increased cost of refining crude oil that has been extracted using lignins.
(C) Only one-half to two-thirds of the total oil in a well can be extracted using conventional techniques of pumping and flooding with water.
(D) Petroleum-based substances that can be used as a substitute for lignins in extracting oil are costly and are made from oil, and these substances therefore increase in price as oil increases in price.
(E) The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry.
_________________

Please press kudos if you like my post.

Manager
Joined: 18 Oct 2008
Posts: 196
Followers: 1

Kudos [?]: 21 [0], given: 11

Re: lignins [#permalink]

### Show Tags

18 Jun 2010, 13:02
go with E as all others strengthen the args.

OA?

Last edited by ramana on 19 Jun 2010, 01:20, edited 1 time in total.
Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 997
Location: Singapore
Followers: 20

Kudos [?]: 691 [0], given: 36

Re: lignins [#permalink]

### Show Tags

18 Jun 2010, 19:13
Thanks. Pls elaborate.
_________________

Please press kudos if you like my post.

Manager
Joined: 18 Oct 2008
Posts: 196
Followers: 1

Kudos [?]: 21 [0], given: 11

Re: lignins [#permalink]

### Show Tags

19 Jun 2010, 01:37
A new technique for extracting residues of oil from existing oil wells by using lignins, a by-product of papermaking, is profitable provided that oil prices are over 20 dollars a barrel. Since oil prices are rising, investors looking for companies with prospects for rapid growth in profits would be wise to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity.

Which of the following, if true, most seriously weakens the argument above?
(A) A small quantity of lignins are currently sold by paper manufacturers to chemical companies, but most of the lignins produced are burnt as waste. -- strengthen,worthless/waste byproduct can used to refine oil

(B) The 20-dollar-a-barrel oil price as a threshold of profitability for using lignins allows for the increased cost of refining crude oil that has been extracted using lignins. increased costof refining crude oil using lignins. again profit. stenghten

(C) Only one-half to two-thirds of the total oil in a well can be extracted using conventional techniques of pumping and flooding with water. irrelevant - drawbacks of other techniques.

(D) Petroleum-based substances that can be used as a substitute for lignins in extracting oil are costly and are made from oil, and these substances therefore increase in price as oil increases in price. Costly petroleum-based substance cant be compared to worthless by-product.

(E) The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry. larger than required, implies only some part is used which cant be profit boosting commodity.

correct me if am wrong.
Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 997
Location: Singapore
Followers: 20

Kudos [?]: 691 [0], given: 36

Re: lignins [#permalink]

### Show Tags

19 Jun 2010, 03:50
Anyone else who wanna pitch in

thanks
_________________

Please press kudos if you like my post.

Manager
Joined: 24 Dec 2009
Posts: 224
Followers: 2

Kudos [?]: 37 [0], given: 3

Re: lignins [#permalink]

### Show Tags

21 Jun 2010, 11:54
Answer should be B.

(A) A small quantity of lignins are currently sold by paper manufacturers to chemical companies, but most of the lignins produced are burnt as waste.
-- currently is key word. Though currently lignin is sold in small quantity, in future it might be sold in larger proportion to the chemical companies and eventually creating profits for investors.

(B) The 20-dollar-a-barrel oil price as a threshold of profitability for using lignins allows for the increased cost of refining crude oil that has been extracted using lignins.
-- Since the threshold value of oil per barrel is increasing the cost of refining the crude oil, eventually use of lignins won't be profit making aspect. This will weaken the author's argument.

(C) Only one-half to two-thirds of the total oil in a well can be extracted using conventional techniques of pumping and flooding with water.
-- This answer choice is strengthening the argument. Opposite answer choice.

(D) Petroleum-based substances that can be used as a substitute for lignins in extracting oil are costly and are made from oil, and these substances therefore increase in price as oil increases in price.
-- This answer choice is also strengthening the argument. Opposite answer choice.

(E) The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry.
-- Since lignin is just a by-product, it doesn't matter even if part of it is going to get used by oil industry.

OA please. Thank You.

Thanks,
Akhil M.Parekh
Intern
Joined: 12 May 2010
Posts: 22
Followers: 0

Kudos [?]: 1 [0], given: 0

Re: lignins [#permalink]

### Show Tags

21 Jun 2010, 12:25
E for me too. the argument says that "... to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity. " so if there are larger amounts and thus larger supply there is no reason for such an investment by oil companies.
Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
Joined: 26 Nov 2009
Posts: 997
Location: Singapore
Followers: 20

Kudos [?]: 691 [0], given: 36

Re: lignins [#permalink]

### Show Tags

21 Jun 2010, 19:45
OA is E.

@mikioso : thanks. Theory of demand and supply applies here
_________________

Please press kudos if you like my post.

Forum Moderator
Status: mission completed!
Joined: 02 Jul 2009
Posts: 1426
GPA: 3.77
Followers: 181

Kudos [?]: 792 [0], given: 621

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 02:49
nusmavrik wrote:
OA is E.

@mikioso : thanks. Theory of demand and supply applies here

E for me

Since oil prices are rising, investors looking for companies with prospects for rapid growth in profits would be wise to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity.

The author faultly assumes that demand for lignins will rise Since oil prices are rising and oil companies will need more of this by-product named "lignins".
Yes, it is true but demand will rise if the quantity of lignins is limited, but if NOW it is too much of this stuff?! it would not ris demand. no demand no profit.

The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry.
_________________

Audaces fortuna juvat!

GMAT Club Premium Membership - big benefits and savings

Manager
Joined: 29 Oct 2009
Posts: 66
Followers: 1

Kudos [?]: 2 [0], given: 3

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 03:19
E it is....
Manager
Joined: 11 Feb 2008
Posts: 90
Followers: 1

Kudos [?]: 23 [0], given: 2

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 03:48
+1 for E
_________________

-------------------------------------------------------------------------------------------
Amar
http://amarnaik.wordpress.com

Manager
Joined: 08 Jan 2010
Posts: 194
Followers: 1

Kudos [?]: 3 [0], given: 13

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 10:22
E......
Manager
Joined: 12 Jun 2007
Posts: 128
Followers: 7

Kudos [?]: 64 [0], given: 2

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 13:14
E for me too
Senior Manager
Status: Fighting on
Joined: 14 Mar 2010
Posts: 318
Schools: UCLA (R1 interview-WL), UNC(R2--interview-ding) Oxford(R2-Admit), Kelley (R2- Admit ), McCombs(R2)
WE 1: SE - 1
WE 2: Engineer - 3
Followers: 4

Kudos [?]: 28 [0], given: 3

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 18:59
(A) A small quantity of lignins are currently sold by paper manufacturers to chemical companies, but most of the lignins produced are burnt as waste. < supports the conclusion by saying that the lignins are worthless now and will become more valuable later>
(B) The 20-dollar-a-barrel oil price as a threshold of profitability for using lignins allows for the increased cost of refining crude oil that has been extracted using lignins. <gives the explanation why cost is high>
(C) Only one-half to two-thirds of the total oil in a well can be extracted using conventional techniques of pumping and flooding with water. <gives more support to conclusion by saying that there is a lot of oil that can extracted using lingins>
(D) Petroleum-based substances that can be used as a substitute for lignins in extracting oil are costly and are made from oil, and these substances therefore increase in price as oil increases in price. <gives reason for not using petroleum based products>
(E) The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry. <bingo>
Senior Manager
Joined: 08 Jun 2010
Posts: 397
Location: United States
Concentration: General Management, Finance
GMAT 1: 680 Q50 V32
Followers: 3

Kudos [?]: 82 [0], given: 13

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 21:38
E it is...

I just began to realize a lot of the CR questions expect the test taker to know some supply and demand concepts. Not sure if the GMAC is tuning its test for business folks.
Manager
Joined: 09 Jul 2010
Posts: 150
Followers: 1

Kudos [?]: 22 [0], given: 3

Re: lignins [#permalink]

### Show Tags

26 Jul 2010, 23:37
nusmavrik wrote:
A new technique for extracting residues of oil from existing oil wells by using lignins, a by-product of papermaking, is profitable provided that oil prices are over 20 dollars a barrel. Since oil prices are rising, investors looking for companies with prospects for rapid growth in profits would be wise to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity.

this argument can be easily narrowed down to B and E rest all are beyond the facts given in the argument.

B talks about rising cost, which need not essentially impact profitability. There4 B ruled out.

The scope of the argument is broadened from a new technique for extracting residues of oil, which is expected to be profitable if oil prices are 20\$ a barrel(in premise) to investors looking to invest in paper manufacturing companies, whose worthless by-product will soon be a profit-boosting commodity(in conclusion). Thus there is a gap between the two. To weaken the argument we would need to attack the assumption. For example we could say profitability will be negatively impacted that if not as much of the new technique for extracting oil is significantly applied. Less demand in turn would affect the supply of Lignins. The by-product will soon be a nonprofit-boosting commodity. Consequently investors will not invest in paper manufacturing. E clarifies demand supply relation and attacks the assumption.
_________________

consider cudos if you like my post

SVP
Joined: 17 Feb 2010
Posts: 1558
Followers: 17

Kudos [?]: 495 [0], given: 6

Re: lignins [#permalink]

### Show Tags

27 Jul 2010, 10:35
The choice is definitely between B and E.

The argument is talking about investors who are looking to invest in paper manufacturers with the hope to increase profits. Anything that shows that investing in paper manufacturing will not be a good idea will hurt the argument.

option B does not discuss anything about paper or its by-product

option E says that lignins are too much in supply and will easily able to fulfill the demand for it. Hence no scope of profitability.
Senior Manager
Joined: 23 May 2010
Posts: 442
Followers: 5

Kudos [?]: 92 [0], given: 112

Re: lignins [#permalink]

### Show Tags

27 Jul 2010, 11:23
nusmavrik wrote:
A new technique for extracting residues of oil from existing oil wells by using lignins, a by-product of papermaking, is profitable provided that oil prices are over 20 dollars a barrel. Since oil prices are rising, investors looking for companies with prospects for rapid growth in profits would be wise to invest in paper manufacturers, whose currently almost worthless by-product will soon be a profit-boosting commodity.

Which of the following, if true, most seriously weakens the argument above?
(A) A small quantity of lignins are currently sold by paper manufacturers to chemical companies, but most of the lignins produced are burnt as waste.
(B) The 20-dollar-a-barrel oil price as a threshold of profitability for using lignins allows for the increased cost of refining crude oil that has been extracted using lignins.
(C) Only one-half to two-thirds of the total oil in a well can be extracted using conventional techniques of pumping and flooding with water.
(D) Petroleum-based substances that can be used as a substitute for lignins in extracting oil are costly and are made from oil, and these substances therefore increase in price as oil increases in price.
(E) The quantity of lignins produced annually in the manufacture of paper is several times larger than the amount that is likely to be useful in the oil industry.

knowing your success rate in CR and SC ..
i was expecting a real touhgie from you ... Is GMAT exam in actual so generous ??
I go with E

thnx

P S - comments to be taken lightly ( Oh !! No its a SC question again ..)
u inspire guys like me who are struggling to increase the hit rate eyond 75% ..
Senior Manager
Affiliations: Volunteer Operation Smile India, Creative Head of College IEEE branch (2009-10), Chief Editor College Magazine (2009), Finance Head College Magazine (2008)
Joined: 26 Jul 2010
Posts: 471
Location: India
WE2: Entrepreneur (E-commerce - The Laptop Skin Vault)
Concentration: Marketing, Entrepreneurship
GMAT 1: 710 Q49 V38
WE: Marketing (Other)
Followers: 13

Kudos [?]: 128 [0], given: 24

Re: lignins [#permalink]

### Show Tags

13 Sep 2010, 04:03
Yup...E for me too
_________________

Kidchaos

http://www.laptopskinvault.com

Follow The Laptop Skin Vault on:
Facebook: http://www.facebook.com/TheLaptopSkinVault
Twitter: http://www.twitter.com/LaptopSkinVault

Consider Kudos if you think the Post is good
Unless someone like you cares a whole awful lot. Nothing is going to change. It's not. - Dr. Seuss

Manager
Joined: 08 Feb 2010
Posts: 143
Followers: 1

Kudos [?]: 0 [0], given: 0

Re: lignins [#permalink]

### Show Tags

14 Sep 2010, 06:10
+1 for E
Re: lignins   [#permalink] 14 Sep 2010, 06:10

Go to page    1   2    Next  [ 21 posts ]

Similar topics Replies Last post
Similar
Topics:
Deep-brain stimulation is a new technique 3 05 Jun 2015, 03:09
2 Using new detection techniques, researchers have found 4 29 Oct 2012, 04:03
18 Sorry to open a new thread for an existing topic: 18 09 Mar 2010, 23:01
Sorry to open a new thread for an existing topic: 5 09 Mar 2010, 22:53
1 A new technique for extracting residues of oil from existing 15 11 May 2009, 12:52
Display posts from previous: Sort by

# A new technique for extracting residues of oil from existing

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.