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Consumer and Producer Interest

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Joined: 03 Jul 2013
Posts: 40
Location: United States
Concentration: Finance, General Management
Schools: Mannheim '15
GPA: 3
WE: Human Resources (Consulting)
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Kudos [?]: 19 [0], given: 19

Consumer and Producer Interest [#permalink] New post 25 Aug 2013, 09:58
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Difficulty:

  65% (hard)

Question Stats:

50% (02:46) correct 50% (01:29) wrong based on 112 sessions
Economist: In the interaction between producers and consumers, the only obligation that all parties have to act in the best interests of their own side. And distribution of information about product defects is in the best interests of the consumer, So consumers are always obligated to report product defects they discover, while producers are never obligated to reveal them.

Which one of the following is an assumption required by the economist's argument?

A. It is never in the best interests of producers for a producer to reveal a product defect.
B. No one expects producers to act in a manner counter to their own best interests.
C. Any product defect is likely to be discovered by consumer
D. A product defect is more likely to be discovered by a consumer than by a producer
E. The best interests of consumers never coincide with the best interests of producers

Help Please !!
[Reveal] Spoiler: OA
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Re: Consumer and Producer Interest [#permalink] New post 25 Aug 2013, 10:20
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ANALYZE THE STIMULUS:

Fact: In the interaction between producers and consumers, the only obligation that all parties have to act in the best interests of their own side.
Fact: And distribution of information about product defects is in the best interests of the consumer,
Conclusion: consumers are always obligated to report product defects they discover, while producers are never obligated to reveal them.

Determine the conclusion correctly is KEY to solve assumption questions.

Which one of the following is an assumption required by the economist's argument?

ANALYZE EACH ANSWER:

A. It is never in the best interests of producers for a producer to reveal a product defect.
Correct. The conclusion “producers are never obligated to reveal product defects” is ONLY true if revealing a product defect is NOT the best interests of producers. If you are not sure, let negate the assumption, the conclusion is broken immediately.

B. No one expects producers to act in a manner counter to their own best interests.
Wrong. The argument just talks about producers’ best interest. We have NO information about “their manner counter to their best interests”. In addition, if you negate B: Every one expects producers to act in a manner counter to their own best interests. Does it help to explain why consumer are obligated to reveal product defect, while producers are never do so? Nope. the negated B does not help. Thus, B is not an assumption.

C. Any product defect is likely to be discovered by consumer
Wrong. Does not help to explain why producers are never obligated to reveal product defect.

D. A product defect is more likely to be discovered by a consumer than by a producer
Wrong. Out of scope. The argument does not compare the abilities of consumers and producers in discovering product defect.

E. The best interests of consumers never coincide with the best interests of producers
Wrong. VERY TEMPTING. The argument says consumers are obligated to reveal product defect, while producers are not <== The argument just focuses on a particular topic - product defect. The two groups just do not have same interest in revealing product defect. But the argument does NOT say the two groups ALWAYS have different interests /opposite interests. E is wrong because it generalizes the scope of the argument.

TAKEAWAY:
Conclusion is KEY in assumption questions.
Because Assumption questions belong to "PROVE family" --> just focus on information in the stimulus, do NOT generalize.



Hope it helps.
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Re: Consumer and Producer Interest   [#permalink] 25 Aug 2013, 10:20
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