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For similar cars and drivers, automobile insurance for [#permalink]
07 Dec 2003, 07:27
89% (01:56) correct
11% (03:09) wrong based on 8 sessions
For similar cars and drivers, automobile insurance for collision damage has always cost more in Greatport than in Fairmont. Police studies, however, show that cars owned by Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont. Clearly, therefore, insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont.
Which of the following is an assumption on which the argument depends?
A. Repairing typical collision damage does not cost more in Greatport than in Fairmont.
B. There are no more motorists in Greatport than in Fairmont.
C. Greatport residents who have been in a collision are more likely to report it to their insurance company than Fairmont residents are.
D. Fairmont and Greatport are the cities with the highest collision-damage insurance rates.
E. The insurance companies were already aware of the difference in the likelihood of collisions before the publication of the police reports.
My answer is A.
Only possibility that an insurance company, which has higher taxes in a city where its residents are, on average, slightly less likely to be involved in a collision than residents from other city is making less profit is that mentioned company spends more money on repairing damage. In stimulus , the conclusion is different...so then - A
If it were true that in Greatport it costs more to get your car repaired then charging more in insurance would make sense. But because the author assumes that it does not cost more, hence he concludes that ....
I don't think I have explained properly. Official ans?