Electric utilities pay less for low-quality coal per ton : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 20 Jan 2017, 17:00

### 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

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

# Electric utilities pay less for low-quality coal per ton

Author Message
TAGS:

### Hide Tags

Director
Joined: 29 Nov 2012
Posts: 898
Followers: 14

Kudos [?]: 1045 [2] , given: 543

Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

04 Feb 2013, 20:18
2
KUDOS
9
This post was
BOOKMARKED
00:00

Difficulty:

55% (hard)

Question Stats:

59% (02:28) correct 41% (01:31) wrong based on 328 sessions

### HideShow timer Statistics

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.
The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.

Can someone provide detailed explanations of the answer choices. Thanks!
[Reveal] Spoiler: OA

_________________

Click +1 Kudos if my post helped...

Amazing Free video explanation for all Quant questions from OG 13 and much more http://www.gmatquantum.com/og13th/

GMAT Prep software What if scenarios http://gmatclub.com/forum/gmat-prep-software-analysis-and-what-if-scenarios-146146.html

If you have any questions
New!
VP
Joined: 24 Jul 2011
Posts: 1126
GMAT 1: 780 Q51 V48
GRE 1: 1540 Q800 V740
Followers: 124

Kudos [?]: 540 [0], given: 19

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

05 Feb 2013, 01:47
A) CORRECT. Although utilities pay less for low-quality coal, they must use more of it and also bear expenditures involved in ash disposal. Therefore a policy of always buying low-quality coal might not always lead to economic benefit if the costs are greater than the savings.
B) Incorrect. Even if the cost of disposing coal ash is negligible, utilities must buy more of low-quality coal to generate the same amount of electricity. Therefore the savings from buying low-quality coal (as compared to high-quality coal) may be mitigated through the increased usage of low quality coal. Therefore we cannot conclude reasonably that buying high-quality coal will be more expensive in this situation.
C) Incorrect. We are not given any details on the proportion of costs involved so cannot make this conclusion.
D) Incorrect. We are given no information about disposal costs, so we cannot compare.
E) Incorrect. The rate of decline of coal reserves are not based on the costs involved in disposing off ash generated through burning the coal. We cannot reasonably draw this conclusion.

A) is therefore the correct answer.
_________________

GyanOne | Top MBA Rankings and MBA Admissions Blog

Premium MBA Essay Review|Best MBA Interview Preparation|Exclusive GMAT coaching

Get a FREE Detailed MBA Profile Evaluation | Call us now +91 98998 31738

Senior Manager
Joined: 22 Nov 2010
Posts: 288
Location: India
GMAT 1: 670 Q49 V33
WE: Consulting (Telecommunications)
Followers: 5

Kudos [?]: 137 [0], given: 75

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

05 Feb 2013, 10:57
fozzzy wrote:
Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.
The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.

Can someone provide detailed explanations of the answer choices. Thanks!

Why D is wrong?

D is assumption , right? What if disposal of Coal ash from low quality coal cost $10 and disposal of Coal ash from High quality coal cost$50.

Assumption is hidden premise--> Strengthner

D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
_________________

YOU CAN, IF YOU THINK YOU CAN

Intern
Joined: 15 Jun 2012
Posts: 8
Followers: 0

Kudos [?]: 10 [0], given: 5

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

05 Feb 2013, 13:20
Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

I'm going to do a hypothetical based on what's given: Ordering a ton of coal. It's 45 dollars for a ton of low quality coal, and $10 for a ton of high quality coal. Hypothetically, say 1.5 tons is needed to generate electricity from low quality coal, and 1 ton is needed to generate electricity from high quality coal. This means our costs are at$7.50 for low quality coal buyers, and $10 for high quality coal buyers for the generation of electricity. Now we will look up disposal, for a ton of low quality coal we will say it'd$10 a ton for disposal, and $5 for high quality coal disposal. This creates low quality coal burning ton price of$17.5 and a high quality price off 15\$. Ultimately, this isnt necessary to do, but it paints the picture.

The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.Correct. This is essentially saying, buying low priced coal might not always be the economic best option. See above, there are other costs which might make it economically not better. Again, this isn't saying that it absolutely must always be true, it's just saying that it must "could be true"
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coalNO. This isn't guaranteed, because aside from disposal you have electricity generation. We don't know if they need far more coal to produce electricity. If the case, this would be false.
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal. We don't know what transportation costs will even be.
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.No. Apples to apples. Could be true, we don't know for sure though.
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal. No. We don't know if this is the case or not.
Manager
Joined: 27 Jul 2012
Posts: 98
Location: India
GMAT Date: 10-25-2012
WE: Consulting (Computer Software)
Followers: 3

Kudos [?]: 94 [0], given: 62

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

06 Feb 2013, 02:56
Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible. can be proved from the passage
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal. output of low quality coal is less, probable lot more low quality coal needs to be burned to match the output of high quality coal and that may equalise or exceed the cost for generating power from low quality coal
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal. Transportation cost is out of scope
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal. passage does not compares costs of low quality ash and high quality ash
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal. can't be sure,people might use low quality coal because of cost reasons and they might not like to use low quality coal for lower output
_________________

if my post helped you, let me know by pressing Kudos...

Senior Manager
Joined: 07 Nov 2012
Posts: 346
Schools: LBS '14 (A)
GMAT 1: 770 Q48 V48
Followers: 191

Kudos [?]: 366 [2] , given: 4

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

30 Sep 2013, 01:59
2
KUDOS
Hi Responding to a PM, regarding why D is wrong.

First let us break down the paragraph point by point:

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal.
Low quality coal cheaper than high quality coal

Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity.
But need to burn more of it to make same amount of electricity

Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.
Low quality coal also costs more in disposal costs

The considerations above, if true, most strongly support which of the following claims?
These 3 statements add up to what?

D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
D only really talks about the last one of the 3 points. It's not really related to the whole debate - that is to say which is the better OVERALL option high or low quality.

Hope it helps
_________________

Former GMAT Pill student, now on staff. Used GMATPILL OG 12 and nothing else: 770 (48,48) & 6.0

... and more

Manager
Joined: 13 Jul 2013
Posts: 75
GMAT 1: 570 Q46 V24
Followers: 0

Kudos [?]: 9 [0], given: 21

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

03 Jan 2014, 00:23
plumber250 wrote:
Hi Responding to a PM, regarding why D is wrong.

First let us break down the paragraph point by point:

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal.
Low quality coal cheaper than high quality coal

Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity.
But need to burn more of it to make same amount of electricity

Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.
Low quality coal also costs more in disposal costs

The considerations above, if true, most strongly support which of the following claims?
These 3 statements add up to what?

D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
D only really talks about the last one of the 3 points. It's not really related to the whole debate - that is to say which is the better OVERALL option high or low quality.

Hope it helps

In the same way can you please explain why A is correct? Also what exactly the question is asking?
Senior Manager
Joined: 03 May 2013
Posts: 356
Location: India
Concentration: Operations, Human Resources
Schools: ISB '16, IIMA (M)
GPA: 4
WE: Human Resources (Human Resources)
Followers: 3

Kudos [?]: 118 [0], given: 70

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

03 Jan 2014, 06:55
FACT1. Electric utilities pay less for low-quality coal per ton than for high-quality coal.
FACT2. More low-quality coal than high—quality coal must be burned to generate the same amount of electricity.
FACT3. Low-quality coal generates more ash than does high-quality coal PER TON.
FACT4. Disposal of ash is becoming more and more expensive.

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible....YES ... BECAUSE THERE ARE OTHER FACTORS ALSO EG QUANTITY USED, ASH DISPOSAL... ETC
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal...CAN'T REALLY SAY THAT.....OUT PUT ALSO MATTERS.....
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal...COULD BE TRUE IF COAL COST PER TON MORE THAN TRANSPORTATION COST PER TON IN BOTH CASES...BUT THAT'S NOT ASSURED.....
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal......SINCE IT IS ONE TON ASH IN BOTH CASES.... APPEARS TO BE OK.....BUT MAY BE PHYSICAL QUALITY OF ASH MAY LEAD TO VARIATION.....
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal....WHY PRESUME LOW QUALITY WILL BE PREFERRED IN THIS CASE........

BETWEEN "A"AND "D"........"A" APPEARS BETTER OPTION.......
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10534
Followers: 919

Kudos [?]: 203 [0], given: 0

Re: Electric utilities pay less for low-quality coal per ton [#permalink]

### Show Tags

21 Jan 2016, 17:36
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Electric utilities pay less for low-quality coal per ton   [#permalink] 21 Jan 2016, 17:36
Similar topics Replies Last post
Similar
Topics:
28 2016 OG: Politician: Hybrid cars use significantly less fuel per kilom 17 01 Aug 2015, 10:50
5 If a country s manufacturing capacity is fully utilized, 6 27 Jan 2013, 13:08
1 The Hazelton coal-processing plant is a major employer in 4 04 Jul 2011, 15:25
The coal mines at Newcastle were so rich that all the coal 4 19 Mar 2011, 12:02
Using clean-coal technologies to repower existing factories 0 29 Sep 2007, 19:50
Display posts from previous: Sort by