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IR Question_table analysis

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IR Question_table analysis [#permalink] New post 03 Jul 2012, 20:12
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I have solved the last one . But i have not able to solve the first and second one . Can anyone solve the first and second one ? Pls explain me how you have solved them .
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Re: IR Question_table analysis [#permalink] New post 05 Jul 2012, 10:50
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Dear debabrata44,

Hi, there. I'm happy to help with this. :)

The first statement:
The changes in the seasonally adjusted prices for transportation services between March 2010 and September 2010 were, on average, less than the changes in seasonally adjusted prices of energy services for the same period.

Well let's look at those two. For the transportation row, we have:
0.4, 0.4, 0.4, 0, 0, 0.4, 0.3
What exactly do those numbers mean? Well, the prompt tells us:
An increase in CPI-U by a certain fractional amount means an increase by that fractional amount in overall prices within the relevant category.

That's not very well worded at all. What's the source of this question? Reading that line in the prompt, I would think that it's trying to say --- a 0.4 is a 40% increase in price. That's fine, but I notice some of the values in the table are negative numbers less than one, like -1.6, but you can't have a drop in price of more than 100%!!! So, I am going to guess that means, 0.40 is a forty-cent increase, and -1.6 is a $1.60 decreases --- either that or something similarly additive --- but if that's what they mean, it's far from perfectly clear in the wording.

We'll take that latter interpretation as the our tentative working model.

One thing that's tricky is --- the first number in the sequence, 0.4 for transportation and 1.4 for energy, is the change in CPU-I from the previous month (February 2010) to March 2010, so if we considering the change from March to September, we don't include that first number.

For transportation, that gives us 0.4 + 0.4 + 0 + 0 + 0.4 + 0.3 = 1.5 --- I guess that's a $1.50 increase in CPU-I from March to September.

For energy, we have (-0.5) + (-0.5) + (-1.6) + 0.9 + 0.8 = -0.9 -- so, energy had a net drop in the period from March to September.

Again, the unclear wording has me feeling like I am guessing at exactly what they mean, but if I have guessed correct on my interpretation, then the numbers indicate that transportation increased more than energy --- in fact, transportation increased, and energy decreased, from March to September. So, the answer to the first question is No.

The second statement:
The seasonally adjusted price for used cars and trucks was higher in September 2010 than it was in March 2010.

Scanning across the "used cars and trucks" row, we see all positive numbers except a (-0.7) at the end --- that would cancel out the +0.7 immediately before it, and the sum of the others would have to be positive. A net positive change from March to September. Therefore, the September value is higher --- the answer is Yes.

Does all this make sense?
Here's a free lesson about GMAT IR:
http://gmat.magoosh.com/lessons/644-int ... -reasoning
and, in case you haven't see it already, here's a free eBook about the IR question:
http://magoosh.com/gmat/2012/gmat-integ ... ing-ebook/
I hope all this is helpful. Please let me know if you have any additional questions.

Mike :)
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Re: IR Question_table analysis [#permalink] New post 05 Jul 2012, 14:47
Thanks a lot mikemcgarry for your response !! I did not understand your explanation for second question !!

It is asking whether seasonally adjusted price for September is higher than March . we can see that in September the changes is negative while in March changes is positive . so it is yes .

It is asking for only September and March . As per my understanding we do not have to look for all values from March to September which will give net positive change as per your explanation .

Pls response ..
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Re: IR Question_table analysis [#permalink] New post 05 Jul 2012, 15:28
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debabrata44 wrote:
Thanks a lot mikemcgarry for your response !! I did not understand your explanation for second question !!

It is asking whether seasonally adjusted price for September is higher than March . we can see that in September the changes is negative while in March changes is positive . so it is yes .

It is asking for only September and March . As per my understanding we do not have to look for all values from March to September which will give net positive change as per your explanation .

Pls response ..


Insofar as I understand what is given on this table, the numbers in the table are changes from month to month. Admittedly, I am not 100% sure of this interpretation, because I find the wording quite poor. Nevertheless, the values have to be changes of some kind, not the values of the CPI-U themselves, because the *value* of the CPI-U couldn't be negative (things don't have negative prices) and we have negative values on the chart. I must say, I even went on the web to read about the CPI and how it's calculated --- which should be totally unnecessary for a well-written question --- and even then I can't reconcile what this question says with what the real-world CPI means.

If the values given were the actual value of the CPI-U, then we could just look at March and September, but that's not the case. When you see the -0.7 for September, that tells you nothing about the value of the CPI-U in September, but rather it indicates the change from August to September. Since the values are changes from month to month, we have to look at the entire sequence of values from March to September.

As I pointed out, the first number, the value in the "March 2010" column, is irrelevant --- that's the change from February 2010 to March 2010, which is not part of the period from March to September.

Again, assuming that the changes are additive in nature, such as changes in the dollar amount itself, we could say
A = CPI-U of used cars and trucks in March 2010
Then, we would have
CPI-U of used cars and trucks in April 2010 = A + 0.2
CPI-U of used cars and trucks in May 2010 = A + 0.2 + 0.6
CPI-U of used cars and trucks in June 2010 = A + 0.2 + 0.6 + 0.9
CPI-U of used cars and trucks in July 2010 = A + 0.2 + 0.6 + 0.9 + 0.8
CPI-U of used cars and trucks in August 2010 = A + 0.2 + 0.6 + 0.9 + 0.8 + 0.7
CPI-U of used cars and trucks in September 2010 = A + 0.2 + 0.6 + 0.9 + 0.8 + 0.7 + (-0.7) = A + 2.5

So. the March value is A, and the September value is A + 2.5, so the September value is bigger. Therefore, the answer is Yes.

Does that make sense? Please let me know if I can clear anything else up.

Mike :-)
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Re: IR Question_table analysis [#permalink] New post 05 Jul 2012, 18:09
Good discussion! I too, was unsure about the compounding effect of the CPI and whether the increase or decrease was a percentage or actual dollar value.
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Re: IR Question_table analysis [#permalink] New post 05 Jul 2012, 19:26
Thanks a lot mikemcgarry !! Now I understand it !!
Re: IR Question_table analysis   [#permalink] 05 Jul 2012, 19:26
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