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Escalating worldwide demand for corn has led to a sharp

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Escalating worldwide demand for corn has led to a sharp [#permalink] New post 27 Jan 2008, 02:03
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B
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Question Stats:

66% (02:17) correct 34% (01:11) wrong based on 43 sessions
Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for
livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.
Which of the following, if true, most helps to justify the observers’ expectation?

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.
D. As meat prices rise, the number of livestock producers is likely to rise again.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.
[Reveal] Spoiler: OA
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 27 Jan 2008, 02:25
i think its E...whats the OA?
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 27 Jan 2008, 02:35
rafiaiqbal wrote:
i think its E...whats the OA?



B...I donìt know why!
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 28 Jan 2008, 05:35
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Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for
livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ expectation?

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 28 Jan 2008, 10:51
walker wrote:
Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for
livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ expectation?

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.


now it is clear!
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 28 Jan 2008, 11:38
I agree. B must be the answer.

marcodonzelli wrote:
walker wrote:
Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for
livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ expectation?

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.


now it is clear!
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 28 Jan 2008, 13:48
We shoudl find a reason for the observers expectation that their would be a decrese in meat price.

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.(Corn is not observers are talking about)
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.(Could be. b'coz if the farmers send their livestock early to the market, their would be more supply which will cause the decrese in prices)
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.(Out of scope)
D. As meat prices rise, the number of livestock producers is likely to rise again.([color=#BF00800]Observer is talking about price decrese[/color])
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.(The farmers investment on the livestock will increase or decrese. V dont know if the feeder being used it expensive than corn or not)


So, will go for B

OA?
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 28 Jan 2008, 22:09
Here is my take - hope this helps!

Conclusion: Observers expect an immediate short-term decrease in meat prices.
Argument: Corn is extensive feed for livestock and because profit margins are tight in the livestock business, many farmers leaving the Corn business.


A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it. [The argument is concerned about immediate decline in livestock price – nothing to do with corn prices decline – eliminate it]

B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. (Hold it)

C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.[Nothing discussed about dietary habits in the passage – eliminate it]

D. As meat prices rise, the number of livestock producers is likely to rise again.[Nothing addressing the short-term decline – eliminate it]

E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.[This is also no specified as part of the argument – eliminate it]

Answer: B
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 29 Aug 2011, 18:47
WAs a close call btw B and D.

The word short term decrease made me choose B.
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 07 Sep 2011, 16:56
marcodonzelli wrote:
Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for
livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.
Which of the following, if true, most helps to justify the observers’ expectation?

A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.
D. As meat prices rise, the number of livestock producers is likely to rise again.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.


B it is. The rest of answer choices does not explain why the meat prices might decrease.
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Re: Escalating worldwide demand for corn has led to a sharp [#permalink] New post 02 Jun 2014, 00:14
I am unable to understand this question. Can you please elaborate this demand-supply problem?
My Premises:
1. Corn Demand Increase
--leads to --> Corn Prise Increase
2. Farmers leave Corn Business, because a) Corn will be used as a livestock b) Margins are tight in livestock. (I am not clear in this )
--leads to --> Fewer suppliers of Corn?
Questions:
#1. Farmers leave livestock business OR Corn business ?
#2. As margins in livestock are tight. They leave livestock business and join Corn business. Is it correct ?
#3. If farmers join Corn business after leaving livestock business, Price of meat should increase.

Conclusion:
Immediate short-term decrease in meat prices.
#4. I tempted to chose E, but its wrong.
Re: Escalating worldwide demand for corn has led to a sharp   [#permalink] 02 Jun 2014, 00:14
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