Find all School-related info fast with the new School-Specific MBA Forum

It is currently 28 Jul 2016, 09:28
GMAT Club Tests

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

lets say the time limit for this is 60 sec Canadian wheat

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Director
Director
User avatar
Joined: 21 Dec 2010
Posts: 650
Followers: 14

Kudos [?]: 182 [0], given: 51

lets say the time limit for this is 60 sec Canadian wheat [#permalink]

Show Tags

New post 15 May 2011, 08:49
1
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

66% (02:40) correct 34% (01:54) wrong based on 216 sessions

HideShow timer Statistics

lets say the time limit for this is 60 sec

Canadian wheat farmers produced so much wheat over the last season that wheat prices plummeted. The government tried to boost wheat prices by offering farmers who agreed not to harvest 20 percent of their wheat field compensation up to a specified maximum per farm.

The Canadian government's program, if successful, will not be a net burden on the budget. Which of the following, if true, is the best basis for an explanation of how this could be so?


(A) If prices were allowed to remain low, the farms would be operating at a loss, causing the government to lose tax revenue on farm profits.

(B) Wheat production in several countries declined the year that the compensation program went into effect in Canada.

(C) The first year that the compensation program was in effect, wheat acreage in Canada was 5% below its level in the base year for the program.

(D) The specified maximum per farm meant that for very large wheat farms the compensation was less per acre for those acres than they were for smaller farms.

(E) Farmers who wished to qualify for compensation program could not use the land not harvested for wheat to grow another crop.
[Reveal] Spoiler: OA

_________________

What is of supreme importance in war is to attack the enemy's strategy.

VP
VP
avatar
Status: There is always something new !!
Affiliations: PMI,QAI Global,eXampleCG
Joined: 08 May 2009
Posts: 1353
Followers: 16

Kudos [?]: 209 [0], given: 10

Re: wheat and budget [#permalink]

Show Tags

New post 15 May 2011, 11:28
well !! went much above the time limit though.

between A and C, more production will actually help boost the prices.

A is clean and provides solid reason,here.
_________________

Visit -- http://www.sustainable-sphere.com/
Promote Green Business,Sustainable Living and Green Earth !!

Manager
Manager
User avatar
Joined: 11 Nov 2011
Posts: 76
Location: United States
Concentration: Finance, Human Resources
GPA: 3.33
WE: Consulting (Non-Profit and Government)
Followers: 1

Kudos [?]: 6 [0], given: 76

GMAT ToolKit User
Re: lets say the time limit for this is 60 sec Canadian wheat [#permalink]

Show Tags

New post 04 Jan 2015, 18:10
I do not get this question. If the government loses tax revenue from farm profits and yet has to compensate farmers who agreed not to harvest, should the government be running a budget deficit?
SVP
SVP
avatar
Joined: 17 Jul 2014
Posts: 1632
Location: United States
GMAT 1: 550 Q39 V27
GMAT 2: 560 Q42 V26
GMAT 3: 560 Q43 V24
GMAT 4: 650 Q49 V30
GPA: 3.56
WE: General Management (Transportation)
Followers: 11

Kudos [?]: 191 [0], given: 107

GMAT ToolKit User Premium Member Reviews Badge
lets say the time limit for this is 60 sec Canadian wheat [#permalink]

Show Tags

New post 27 Nov 2015, 17:04
this is a paradox type question.

the correct answer should provide new information, so that when to have it in our "magic formula", the paradox would be explained.
first of all, there are 3 types of correct answer that would help solve the paradox => showing that the ineffective implementation of the plan; => alternate explanation; => or improper comparison.

Now, the government would pay $, yet the plan would not cause any losses.
clearly, the answer choice should present an alternate explanation why it is so!

now, let's get back to the magic formula:

Because (answer choice), the government would not have $$ loss, although it would give $$ to farmers.


A If prices were allowed to remain low, the farms would be operating at a loss, causing the government to lose tax revenue on farm profits.
clearly, the assumption here must be that the $$ given would not be > than the $$ received from taxes.

B Wheat production in several countries declined the year that the compensation program went into effect in Canada.
does not help to solve the paradox.

C The first year that the compensation program was in effect, wheat acreage in Canada was 5% below its level in the base year for the program.
still doesn't help to solve the issue.

D The specified maximum per farm meant that for very large wheat farms the compensation was less per acre for those acres than they were for smaller farms.
while it might be true, this answer choice does not help us to explain why would the gvt not lose $$ even though they would offer $ to farmers.

E Farmers who wished to qualify for compensation program could not use the land not harvested for wheat to grow another crop.
irrelevant and does not explain the paradox.

A thus is the best.
lets say the time limit for this is 60 sec Canadian wheat   [#permalink] 27 Nov 2015, 17:04
    Similar topics Author Replies Last post
Similar
Topics:
1 The Canadian elk has traditionally been limited in its geographic rang tia2112 2 09 Jun 2015, 12:46
19 Experts publish their posts in the topic The Canadian elk has traditionally been limited guerrero25 6 21 Jul 2014, 23:35
1 this one is a bit interesting , lets say the time limit is garimavyas 4 15 May 2011, 09:22
7 Canadian wheat farmers produced so much wheat over the last AtifS 10 06 Mar 2010, 00:02
My neighbor's dogs bark and howl every time their owner lets GMATT73 5 22 Aug 2006, 10:11
Display posts from previous: Sort by

lets say the time limit for this is 60 sec Canadian wheat

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.