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In Gandania, where the government has a monopoly on tobacco

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In Gandania, where the government has a monopoly on tobacco [#permalink] New post 16 Oct 2006, 19:49
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84% (02:16) correct 16% (02:04) wrong based on 133 sessions
In Gandania, where the government has a monopoly on tobacco sales, the incidence of smoking-related health problems has risen steadily for the last twenty years. The health secretary recently proposed a series of laws aimed at curtailing tobacco use in Gandania. Profits from tobacco sales, however, account for ten percent of Gandania’s annual revenues. Therefore, Gandania cannot afford to institute the proposed laws.

Which of the following, if true, most seriously weakens the argument?

A. All health care in Gandania is government-funded.
B. Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports.
C. The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years.
D. Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.
E. No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use.
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 [#permalink] New post 16 Oct 2006, 19:56
I'm for A.
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 [#permalink] New post 16 Oct 2006, 20:24
A.
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 [#permalink] New post 17 Oct 2006, 05:57
Yeah..A is the only relevant choice.
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 [#permalink] New post 17 Oct 2006, 14:42
A is the only one which makes sense.
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Re: CR - Gandania [#permalink] New post 17 Oct 2006, 15:01
By spending less on health care, the gov. will cut an important source of debt in the LR. Therefore, A would weaken the argument.
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 [#permalink] New post 17 Oct 2006, 17:26
A is close.
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Re: CR - Gandania [#permalink] New post 18 Nov 2008, 18:36
Any opinions on this guys?
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Re: CR - Gandania [#permalink] New post 19 Nov 2008, 03:57
winskc wrote:
In Gandania, where the government has a monopoly on tobacco sales, the incidence of smoking-related health problems has risen steadily for the last twenty years. The health secretary recently proposed a series of laws aimed at curtailing tobacco use in Gandania. Profits from tobacco sales, however, account for ten percent of Gandania’s annual revenues. Therefore, Gandania cannot afford to institute the proposed laws.

Which of the following, if true, most seriously weakens the argument?

A. All health care in Gandania is government-funded.
B. Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports.
C. The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years.
D. Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.
E. No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use.


Only A & B are in contention. But it does not specify if what percentage of the tobacco..does the govt exports.. if it exports all, then, it also weakens.
But again..A is far more stronger choice for B to let in. :) I will go for A, what is OA.. ?
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Re: CR - Gandania [#permalink] New post 19 Nov 2008, 05:09
why not D?
(A) if all health care is government funded, govt ends up losing money and since it has a monoply on tobacco sales, it will have reason for enforcing the laws.
(B)doesnt give me another reason for not enforcing the laws.
(C)niether strengthens nor weakens.
(D)if tobacco is the main source of revenue, the govt will certainly think twice before enforcing the laws.gives another reason for thus not enforcing.
(E) irrelevant.

i think the main point here is that government has a monopoly on tobacco sales

OA pls?
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Re: CR - Gandania [#permalink] New post 19 Nov 2008, 07:09
I will go with D
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Re: CR - Gandania [#permalink] New post 19 Nov 2008, 15:33
can't be D.

Conclusion is G cannot afford to institute the proposed laws that curtail the use of tobacco.

We need some thing that says G can afford to or have to afford.

Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government, but still those profits make up only 10% of the revenues and the remaining 90% is untouched. Also it does not say how much will profits go down by to make such decision.

But with A, all HC funded by govt, govt can eliminate health costs and improve public health at the expense of profits from tobacco.

hence A
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Re: CR - Gandania [#permalink] New post 20 Nov 2008, 06:45
The OA is B.

Now, I just need an explanation of Y :-)
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Re: CR - Gandania [#permalink] New post 20 Nov 2008, 08:00
bigfernhead wrote:
The OA is B.

Now, I just need an explanation of Y :-)


Typo??

I dont know how B can be a possibility. If at all , it does strengthen it by saying that exports will not rise and revenues lost at home will not be made some where else. So G cannot afford to have cuts.
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Re: CR - Gandania [#permalink] New post 20 Nov 2008, 11:58
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Where do these questions with the strange OA's come from? icandy is correct: B (if it is relevant at all) would strengthen the argument, not weaken it. The correct answer is A.

As for D, the fact that profits from tobacco are the single greatest source of revenue tells us nothing at all about how much those profits would decline because of the laws, nor about how much could or could not be replaced by other revenue sources.

If anything, D might weaken the argument by showing that the WORST possible outcome would be to lose a maximum of 10% of revenues.
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Re: CR - Gandania [#permalink] New post 19 Nov 2012, 10:46
bigfernhead wrote:
The OA is B.

Now, I just need an explanation of Y :-)



The OA is A. Confirmed .


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Re: In Gandania, where the government has a monopoly on tobacco [#permalink] New post 24 Jun 2013, 22:52
Still don't understand why A is right?

Arguement: Profits from Tobacco = 10% of Gandania'a Revenue. So they should not implement this law.

A. All health care in Gandania is government-funded. <-- How does this come into picture? Isn't this Out of scope?

We can arrive at this by eliminating all other options but how is this justified?
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Re: In Gandania, where the government has a monopoly on tobacco [#permalink] New post 25 Jun 2013, 22:24
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KalEl wrote:
Still don't understand why A is right?


Hi KalEl. I'm glad to help.

This question is tough. OA is A.


ANALYZE THE STIMULUS:

Fact: In Gandania, the government has a monopoly on tobacco sales,
Fact: However, Profits from tobacco sales account for 10% of Gandania's annual revenues.
Conclusion: Gandania cannot afford to institute the proposed laws.

The KEY of this question is the formula: GOV NET INCOME = GOV REVENUE - GOV EXPENSES.

The author says sales from tobacco account 10% of Government Revenue ==> He concludes that if the proposed laws are instituted ==> Gov Revenues decrease ==> Net Income will decrease ==> Government CAN NOT afford to institute these laws.

The assumption is: Government expenses will not decrease or stay the same after the proposed laws are instituted.

What if: The new laws make Government Revenue decrease, say 10%, but they also make Government Expenses decrease, say greater than 10% ==> Government Net Income will increase. That's the KEY.


ANALYZE EACH ANSWER:

A) All health care in gandania is government-funded.
Correct. Even the new laws make government revenues decrease, but what if they also make government expenses DECREASE too (because the government CAN DECREASE its expenses for health care regarding tobacco issues.) ==> Government Net income may not decrease or even increase.

B) Implementing the proposed laws is not likely to cause significant increase in the amount of tobacco gandania exports.
Wrong. Total sales = Domestic sales + Exports ==> New laws make both domestic sales and export decrease ==> Government total revenue will decrease for sure.

C) The percentage of revenue gandania recieves from tobaco sales has remained steady in recent years.
Wrong. Does not affect at all. "remain steady in recent years" does not mean "remain forever".

D) profits from tobaco sales far surpass any other single source of revenue for the gandandian government.
Wrong. If profits from tobacco sales are much greater than any other source ==> their decline will make a big shortfall of government revenue in the future.

E) No government official in gandania has ever previously proposed laws aimed at curtailing tobacco use.
Wrong. Out of scope for sure.


TAKEAWAY:
In real GMAT, when you see questions regarding Profit, Expenses, Revenue, Costs.....
* If the questions have ONLY profit/revenues ==> Make conclusion ==> Think about the opposite side: Costs/Expenses
* If the questions have ONLY Costs/Expenses ==> Make conclusion ==> Think about the opposite side: Revenue/Profit.

Hope it helps
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Re: In Gandania, where the government has a monopoly on tobacco [#permalink] New post 26 Jun 2013, 03:05
@pqhai:

Ah, I get it now. Didn't think enough to link health care and tobacco.

+1 Kudos!!! :)

Thanks!
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Re: In Gandania, where the government has a monopoly on tobacco [#permalink] New post 02 Jul 2013, 22:19
Its A... Close option. :-D
Re: In Gandania, where the government has a monopoly on tobacco   [#permalink] 02 Jul 2013, 22:19
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