In 1960, 10 percent of every dollar paid in automobile : GMAT Critical Reasoning (CR)
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In 1960, 10 percent of every dollar paid in automobile

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In 1960, 10 percent of every dollar paid in automobile [#permalink]

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23 Feb 2009, 06:55
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In 1960, 10 percent of every dollar paid in automobile insurance premiums went to pay costs arising from injuries incurred in car accidents. In 1990, 50 percent of every dollar paid in automobile insurance premiums went toward such costs, despite the fact that cars were much safer in 1990 than in 1960.

Which of the following, if true, best explains the discrepancy outlined above?

(A) There were fewer accidents in 1990 than in 1960.
(B) On average, people drove more slowly in 1990 than in 1960.
(C) Cars grew increasingly more expensive to repair over the period in question.
(D) The price of insurance increased more rapidly than the rate of inflation between 1960 and 1990.
(E) Health-care costs rose sharply between 1960 and 1990.
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23 Feb 2009, 07:44
I would go with E because that seems to be the only possible answer here...
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23 Feb 2009, 07:46
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Got an E as well, C is a trap as it talks about repair costs and not costs incurred because of injury
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23 Feb 2009, 09:24
Hmmmm Gud question.
The main point in this question is that we have to pay attention to the costs arising from injuries ocurred in car accidents. C may look tempting at first but we r not bothered abt costs arising out of car repairs. Among all choices , E is the best.

ConkergMat wrote:
In 1960, 10 percent of every dollar paid in automobile insurance premiums went to pay costs arising from injuries incurred in car accidents. In 1990, 50 percent of every dollar paid in automobile insurance premiums went toward such costs, despite the fact that cars were much safer in 1990 than in 1960.

Which of the following, if true, best explains the discrepancy outlined above?

(A) There were fewer accidents in 1990 than in 1960.
(B) On average, people drove more slowly in 1990 than in 1960.
(C) Cars grew increasingly more expensive to repair over the period in question.
(D) The price of insurance increased more rapidly than the rate of inflation between 1960 and 1990.
(E) Health-care costs rose sharply between 1960 and 1990.
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23 Feb 2009, 10:47
IMO E.
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23 Feb 2009, 10:55
Costs increase toward automobile injuries ----> Health cost increased.

IMO E
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24 Feb 2009, 22:07
icandy wrote:
Got an E as well, C is a trap as it talks about repair costs and not costs incurred because of injury

Yes, C is indeed a trap. Agree with E.
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25 Feb 2009, 01:23

The automobile insurance is used to cover the medical bills from injuries that are casued due to accidents, and E is the only option tat explains the stimulus
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27 Feb 2009, 18:46
As explained above, E is the best answer.
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Re: In 1960, 10 percent of every dollar paid in automobile [#permalink]

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06 Feb 2013, 05:19
Can anyone explain what is wrong with D?
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06 Feb 2013, 12:15
roopika2990 wrote:
Can anyone explain what is wrong with D?

The premise mentioned in the question is that in 1960, 10% of every dollar paid (.1 cents per dollar) is paid towards injuries occurring from accidents, the same cost rose to 50% of every dollar paid (.5 cents per dollar).

the question stem asks us to resolve this discrepancy that what could be the possible reason for the increase from 0.1 to 0.5 per dollar even though the cars were safer.

Option D talks about increase in Insurance price and nothing about the cost of injuries, so this option is not in scope of passage.
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Re: In 1960, 10 percent of every dollar paid in automobile [#permalink]

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13 Feb 2013, 04:30
Thanks for the explanation , Dinesh ..
Re: In 1960, 10 percent of every dollar paid in automobile   [#permalink] 13 Feb 2013, 04:30
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