|
Author |
Message |
|
TAGS:
|
|
|
Senior Manager
Joined: 21 Dec 2009
Posts: 268
Location: India
Followers: 5
Kudos [?]:
41
[2] , given: 25
|
In January there was a large drop in the number of new [#permalink]
 19 Jan 2010, 09:36
2
This post received
KUDOS
Question Stats:
36% (02:14) correct
63% (01:31) wrong based on 3 sessions
In January there was a large drop in the number of new houses sold, because interest rates for mortgages were falling and many consumers were waiting to see how low the rates would go. This large sales drop was accompanied by a sharp rise in the average price of new houses sold. Which of the following, if true, best explains the sharp rise in the average price of new houses? (A) Sales of higher-priced houses were unaffected by the sales drop because their purchasers have fewer constraints limiting the total amount they pay. (B) Labor agreements of builders with construction unions are not due to expire until the next January. (C) The prices of new houses have been rising slowly over the past three years because there is an increasing shortage of housing. (D) There was a greater amount of moderate-priced housing available for resale by owners during January than in the preceding three months. (E) Interest rates for home mortgages are expected to rise sharply later in the year if predictions of increased business activity in general prove to be accurate
_________________
Cheers,
SD
|
|
|
|
|
|
|
Manager
Joined: 27 Aug 2009
Posts: 157
Followers: 1
Kudos [?]:
7
[0], given: 1
|
Re: In January there was a large drop [#permalink]
19 Jan 2010, 14:39
I think A whats the OA?
|
|
|
|
|
|
Senior Manager
Joined: 21 Dec 2009
Posts: 268
Location: India
Followers: 5
Kudos [?]:
41
[0], given: 25
|
Re: In January there was a large drop [#permalink]
19 Jan 2010, 14:47
OA is Explain ur logic pls
_________________
Cheers,
SD
|
|
|
|
|
|
Senior Manager
Joined: 25 Jun 2009
Posts: 318
Followers: 2
Kudos [?]:
56
[1] , given: 6
|
Re: In January there was a large drop [#permalink]
15 Apr 2010, 08:00
1
This post received
KUDOS
Kind of late to reply but I guess its better to be late than never :D I got to the conclusion thru POE, SudiptoGmat wrote: In January there was a large drop in the number of new houses sold, because interest rates for mortgages were falling and many consumers were waiting to see how low the rates would go. This large sales drop was accompanied by a sharp rise in the average price of new houses sold. Which of the following, if true, best explains the sharp rise in the average price of new houses? (A) Sales of higher-priced houses were unaffected by the sales drop because their purchasers have fewer constraints limiting the total amount they pay. -- (B) Labor agreements of builders with construction unions are not due to expire until the next January.-- Irrelavent (C) The prices of new houses have been rising slowly over the past three years because there is an increasing shortage of housing. --- Okay, this doesnt expain why the prices rose sharply, in fact this says that the prices have been rising slowly over the past, but the question why the prices rose sharply - So basically tempting wrong answer  (D) There was a greater amount of moderate-priced housing available for resale by owners during January than in the preceding three months. -- This infact weakens it, if the supply is high and demand low then prices should go down.(E) Interest rates for home mortgages are expected to rise sharply later in the year if predictions of increased business activity in general prove to be accurate-- This again is irrelavent as in the passage it never mentiones about the increase in the mortage rate |
|
|
|
|
|
Intern
Joined: 28 Sep 2008
Posts: 8
Followers: 0
Kudos [?]:
0
[0], given: 0
|
Re: In January there was a large drop [#permalink]
15 Apr 2010, 17:17
I also think it is A.
Can somebody send the correct answer please.
|
|
|
|
|
|
Senior Manager
Joined: 07 Jan 2010
Posts: 251
Followers: 1
Kudos [?]:
5
[0], given: 16
|
Re: In January there was a large drop [#permalink]
16 Apr 2010, 01:08
sibijosephv wrote: I also think it is A.
Can somebody send the correct answer please. The OA is mentioned in the above post. It is A. A and C are the tempting choices. C, I think, contradicts the premise. It indicates housing shortage, whereas premise is about sales drop. Am I right here? BTW, I picked A as well.
|
|
|
|
|
|
Director
Joined: 25 Aug 2007
Posts: 959
WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Followers: 38
Kudos [?]:
557
[0], given: 40
|
Re: In January there was a large drop [#permalink]
27 Apr 2010, 05:57
Can someone please explanation why A is correct? There is no detail in the stimulus regarding higher-priced houses. People were waiting for mortgages rate drop in January. So, the number of sold house fell. This was accompanied by sharp rise in prices. This is obvious, as the dealers want to balance their profits. So, C fits the best here.
_________________
Want to improve your CR: cr-methods-an-approach-to-find-the-best-answers-93146.html
Tricky Quant problems: 50-tricky-questions-92834.html
Important Grammer Fundamentals: key-fundamentals-of-grammer-our-crucial-learnings-on-sc-93659.html
|
|
|
|
|
|
Senior Manager
Joined: 25 Jun 2009
Posts: 318
Followers: 2
Kudos [?]:
56
[0], given: 6
|
Re: In January there was a large drop [#permalink]
27 Apr 2010, 13:18
ykaiim wrote: Can someone please explanation why A is correct?
There is no detail in the stimulus regarding higher-priced houses.
People were waiting for mortgages rate drop in January. So, the number of sold house fell. This was accompanied by sharp rise in prices.
This is obvious, as the dealers want to balance their profits. So, C fits the best here. I boiled down to A by POE, but to answer your question C is wrong because in the question stem it asks why the prices rose sharply and in C it says the prices have been rising slowly and steadily from last 3 years which is in contradiction to the question stem and it does not explain why the prices rose sharply. Hope that helps ..! Cheers
|
|
|
|
|
|
Manager
Joined: 06 Apr 2010
Posts: 84
Followers: 1
Kudos [?]:
5
[0], given: 2
|
Re: In January there was a large drop [#permalink]
31 Aug 2010, 08:21
sharp rise in the average price of new houses sold. I thought we are dealing with new houses ONLY. (A) deals with houses (expensive ones), not necessarily new houses. I would have thought that this could be the shell game ; similar concept with slight difference. If the houses mentioned are new houses, it would explained it . (C) At least we are dealing with new houses here. the prices were rising slowly because the mortgage were higher. When the mortgages fall,the shortage of new housing combined with lower mortgages will drive the price up real fast I'm sticking with C 
|
|
|
|
|
|
Manager
Joined: 17 Mar 2010
Posts: 197
Followers: 2
Kudos [?]:
22
[0], given: 9
|
Re: In January there was a large drop [#permalink]
01 Sep 2010, 02:33
Only A is sensible
|
|
|
|
|
|
Senior Manager
Joined: 16 Apr 2006
Posts: 284
Followers: 2
Kudos [?]:
5
[0], given: 2
|
Re: In January there was a large drop [#permalink]
02 Sep 2010, 03:47
If more High Priced houses are sold then average price of the houses sold will increase. Hence A.
_________________
Trying hard to achieve something unachievable now....
|
|
|
|
|
|
Manager
Joined: 08 Feb 2010
Posts: 144
Followers: 1
Kudos [?]:
0
[0], given: 0
|
Re: In January there was a large drop [#permalink]
02 Sep 2010, 07:33
I think c is the best here
|
|
|
|
|
|
Manager
Joined: 08 Feb 2010
Posts: 144
Followers: 1
Kudos [?]:
0
[0], given: 0
|
Re: In January there was a large drop [#permalink]
02 Sep 2010, 07:34
Actually bit confused between A and C 
|
|
|
|
|
|
Intern
Joined: 17 Mar 2010
Posts: 48
Followers: 0
Kudos [?]:
2
[0], given: 0
|
Re: In January there was a large drop [#permalink]
02 Sep 2010, 12:12
C doesn't explain the sharp rise in housing price. A is the best.
|
|
|
|
|
|
Manager
Joined: 06 Aug 2010
Posts: 229
Location: Boston
Followers: 2
Kudos [?]:
50
[1] , given: 5
|
Re: In January there was a large drop [#permalink]
02 Sep 2010, 12:18
1
This post received
KUDOS
I said (A) immediately. The argument is that the overall number of houses being sold is down due to people waiting for interest rates on mortgages to drop to a minimum. If at the same time, the average price of houses being sold is going up, it follows that the houses still being sold cost more money. The people who would buy more expensive houses wouldn't be (as) concerned with the interest rates on mortgages, so they're still buying their homes.
(C) doesn't work because it mentions a housing shortage, but if sales are down, there would actually be an EXCESS of houses, not a shortage.
|
|
|
|
|
|
Manager
Joined: 08 Feb 2010
Posts: 144
Followers: 1
Kudos [?]:
0
[0], given: 0
|
Re: In January there was a large drop [#permalink]
03 Sep 2010, 02:57
A it seems
|
|
|
|
|
|
Manager
Joined: 08 Feb 2010
Posts: 144
Followers: 1
Kudos [?]:
0
[0], given: 0
|
Re: In January there was a large drop [#permalink]
03 Sep 2010, 03:13
A and C seems close but will go with A
|
|
|
|
|
|
Senior Manager
Affiliations: Volunteer Operation Smile India, Creative Head of College IEEE branch (2009-10), Chief Editor College Magazine (2009), Finance Head College Magazine (2008)
Joined: 26 Jul 2010
Posts: 472
Location: India
WE2: Entrepreneur (E-commerce - The Laptop Skin Vault)
Concentration: Marketing, Entrepreneurship
GMAT 1: 710 Q49 V38
WE: Marketing (Other)
Followers: 10
Kudos [?]:
73
[0], given: 24
|
Re: In January there was a large drop [#permalink]
06 Sep 2010, 11:34
Answer is A. Easy one
_________________
Kidchaos
http://www.laptopskinvault.com
Follow The Laptop Skin Vault on:
Facebook: http://www.facebook.com/TheLaptopSkinVault
Twitter: http://www.twitter.com/LaptopSkinVault
Consider Kudos if you think the Post is good
Unless someone like you cares a whole awful lot. Nothing is going to change. It's not. - Dr. Seuss
|
|
|
|
|
|
Director
Joined: 18 Feb 2008
Posts: 508
Location: Kolkata
Followers: 5
Kudos [?]:
50
[0], given: 66
|
Re: In January there was a large drop [#permalink]
06 Sep 2010, 11:53
Good one
|
|
|
|
|
|
Intern
Joined: 17 Aug 2010
Posts: 6
Followers: 0
Kudos [?]:
0
[0], given: 9
|
Re: In January there was a large drop [#permalink]
06 Sep 2010, 12:10
IMO A
|
|
|
|
|
|
|
Re: In January there was a large drop
[#permalink]
06 Sep 2010, 12:10
|
|
|
|
|
|
|
|
|
|
Moderators:
metallicafan, rajeevrks27, souvik101990, PTK, MacFauz, noboru, kissthegmat, carcass, willigetmylifeback, mikemcgarry, doe007, Vercules, Legendaddy, tuanquang269, RaviChandra, Marcab, Narenn
|
close
