Waveton hosts an annual weeklong craft fair at which there are

Question

Waveton hosts an annual weeklong craft fair at which there are numerous food vendors. Food vendors are subject to the city's restaurant tax, and in a typical year the city collects about $ 20,000 in restaurant taxes from the fair's food vendors. Therefore, if the fair were to discontinue having food vendors, Waveton's revenue from the restaurant tax would decline by about $ 20,000.

Which of the following is an assumption on which the argument depends?

A) Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $ 20,000 a year.

Which of the following is an assumption on which the argument depends?

A) Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $ 20,000 a year. 
B) Attendance at the craft fair would not decline significantly if there were no food vendors there.
C) Few people who eat food from the food vendors during the weeks of the crafts fair would eat at Waveton's restaurant instead if the food vendors were not available.
D) The food vendors at the crafts fair report their sales for the week of the fair accurately for the tax purposes. 
E) The average price of food purchased from the crafts fair's food vendors is significantly lower than the price of similar food eaten at the restaurants in Waveton.

MartyMurray · Accepted Answer

Explanation

Waveton hosts an annual weeklong crafts fair at which there are numerous food vendors. Food vendors are subject ot city's restaurant tax, and in a typical year the city collects about $20000 in restaurant taxes from the fair's food vendors. Therefore, if the fair were to discontinue having food vendors, Waveton's revenue from the restaurant tax would decline by about $20000.

The conclusion of the argument is the following:

if the fair were to discontinue having food vendors, Waveton's revenue from the restaurant tax would decline by about $20000.

We see that the author has reasoned that, since in a typical year the city collects about $20,000 in restaurant taxes from the fair's food vendors, if there were no food vendors at the fair, the city's revenue from the tax would decline by that same amount.

Which of the following is an assumption on which the argument depends?

This is an Assumption question, and the correct answer will be information that must be true for the evidence to effectively support the conclusion.

A. Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $20000 a year.

The conclusion of the argument is about "revenue from the restaurant tax."

This choice is about costs.

While cost could be an important consideration if the city were seeking to determine the effects of not having food vendors at the fair, the argument works regardless of whether this choice is true.

After all, the size of these costs does not affect how much revenue the city would lose if there were no food vendors at the fair since costs and revenue are different things.

Eliminate.

B. Attendance at the crafts fair would not decline significantly if there were no food vendors there.

This choice has no effect on the argument.

After all, the argument is solely about revenue from the restaurant tax. So, it doesn't involve assumptions about other effects on the crafts fair, such as a decline in attendance, that would not affect the revenue the city gets from the restaurant tax.

If there are were food vendors at the fair, the city would get no restaurant tax revenue from the fair regardless of what attendance is.

Eliminate.

C. Few people who eat food from the food vendors during the week of crafts fair would eat at Waveton's restaurants instead if the food vendors were not available.

This choice could seem irrelevant to the argument because it's about restaurants rather than food vendors or revenue from food vendors. However, if we consider it carefully, we see the following.

The negation of "few people would" is "many people would." Thus, the negation of this choice is "Many people who eat food from the food vendors during the week of crafts fair would eat at Waveton's restaurants instead if the food vendors were not available."

If this choice is not true and it's the case that  many  people who eat food from the food vendors during the week of crafts fair would eat at Waveton's restaurants instead if the food vendors were not available, then although the city would not be getting tax revenue from food vendors, it would still be getting restaurant tax revenue related to the fair because fair attendees would go to restaurants.

In that case, it would not make sense to conclude that tax revenue would decrease by $20,000. After all, some or all of the decrease resulting from discontinuation of having food vendors would be offset by an increase in tax revenue from restaurants.

So, if this choice isn't true, the conclusion doesn't follow from the evidence.

Thus, this choice is an assumption on which the argument depends.

Keep.

D. The food vendors at the crafts fair report their sales for the week of the fair accurately for tax purposes.

Notice that, regardless of whether food vendors report their sales accurately, the way they report their sales has resulted in $20,000 of tax revenue annually. So, regardless of whether they report their sales accurately, it follows that, if there were no food vendors, the city would lose $20,000 in revenue.

So, the argument works regardless of whether this choice is true.

Eliminate.

E. The average price of food purchased from the crafts fair's food vendors is significantly lower than the price of similar food eaten at restaurants in Waveton.

If anything, this choice slightly weakens the argument. After all, if this choice is true, it could be that, if there are no food vendors at the fair, fair attendees will go to restaurants near the fair and pay higher prices and thus generate more tax revenue than the city would have gotten from the food vendors. In that case, the city's revenue would increase, rather than decrease, as a result of the fair's discontinuing having food vendors, a result contrary to what the author of the argument claims would occur.

Another way to handle this choice is to decide that it simply has no effect on the argument. After all, regardless of how low the food vendors' prices are, if there cease to be vendors at the fair, the city will lose the $20,000 in revenue it has been getting from the vendors.

So, either way, this choice doesn't have to be true for the argument to work.

Eliminate.

Correct answer:  C

ReedArnoldMPREP · Answer

Hey there. Looking over your analysis, I think I would say you have some good habits formed and you've started in the right direction, but you need to push yourself to go further.

You said:
 
This is a good, but somewhat imprecise, thought. What kinds of something would make up for the 20k decline? What *specific* decline are you interested in?

You say: 
 
You say it's a *bit* of a stretch... I say it's a big stretch. Why would  a drop in a attendance to the fair mean a drop in attendance of other restaurants (especially if the reason people aren't going to the fair now is a lack of food?) 
 
The negation of 'few' is probably not 'none,' the negation of 'few' is 'many.'

Go back to the argument itself: 
 
Ask yourself what I regard the KEY QUESTION of critical reasoning: "How could   EVEN IF the premises is/are true?"

Try to contextualize that to this argument on your own before reading how I did it! (Please do this--don't just read on).

My contextualization is: "How could the revenue from the restaurant tax NOT decline by ~20K if food vendors were removed from the craft fair, even though those food vendors generate 20K in restaurant tax revenue?"

Notice how specific I am. We're not talking about *all* tax revenue; we're talking about restaurant tax revenue only.

So try to answer that question on your own before reading on.

Okay, now I want you to consider your answer to that question in light of the following:

1). The 20K in restaurant tax from the food trucks MUST go away if the food vendors go away. 
2). So what could possibly make up that 20K in restaurant tax...?

The answer must be: spending that would have gone to the food trucks is made up at other restaurants. That is pretty much the ONLY thing that could plug the hole! So, for the argument to be true, the author must assume that the spending that WOULD have gone to the food vendors *does not go* to other restaurants.

You do not need th answer choices to come to this realization! But once you do, answer C is the only one that makes sense:
 
Yep, that says basically what I need to be true! The food vendor restaurant spending isn't being 'made up' at other restaurants. If we negate C the argument is ruined, as it would say "Many people who eat food from the food vendors during the weeks of the crafts fair would eat at Waveton's restaurants if the food vendors were not available."

ashutosh_73 · Answer

GMATNinja   KarishmaB   GMATGuruNY   ReedArnoldMPREP   AjiteshArun

This one tripped me a little, and i would like some help here.
I was in a fix between (B) and (C). Below is my understanding of both of the options.

Premise ---> Conclusion: 
If fair discontinues food vendors --> revenue from tax would decline by about $ 20k

I went to options thinking that ''what if something comes up and makes up for this $ 20k decline''?
 
Negation of (B): If there were no food vendors, then Attendance would decline significantly
If this is the case then, other restaurants may also lose their business. I know that it is  bit of a stretch to assume other res. losing business , but correct answer (C) also seemed to work on the similar assumption.
 
Negation of (C): Even if the food vendors were not available,  NONE  of the people who eat food from the food vendors during the weeks of the crafts fair would eat at Waveton's restaurant instead.
 NONE  means restaurants are definitely gonna close, hence loss in tax revenue will be more than $ 20k

While (B) doesn't make plausible that other restaurants will close, (C) helps in assuming so. Is the difference between (B) and (C) is of degree?
Or i was being delusional?

PandCduo · Answer

The conclusion is that if food vendors are unavailable then the revenue from tax will be 20k less

If we assume C then the revenue wont be less since the restaurant tax will be morr from waveton restaurants

I think D is correct

Please explain how C is correct because it definitely does not support conclusion

Posted from my mobile device

ashutosh_73 · Answer

This is an official question, hence there should not be any dispute about the correct answer, which is (C). 
I wish i had known any better that ''why C is the correct answer, but i am sure that (D) cannot be the correct answer. 
 
 Negation of D:  Food vendor report their sales inaccurately.
Even if they report inaccurately, they still end up paying 20k. And how do we know in the first place they were reporting the sales accurately OR inaccurately?

I think, you found this option a better one because you thought: well, restuarant pays taxes on pro-rata basis, and hence if they inaccurately report the sales, they will be able to pay less than 20k in future. Hence option (D) is required.

But what if all this while,  they were paying taxes after reporting the sales incorrectly?

ashutosh_73 · Answer

Hi  ReedArnoldMPREP  , Thanks for pushing me here.
I attempted this one again, and the only thing i could come up with was: what if some new restaurants make up for $ 20k? which is exactly what (C) says.
Now i realise, i asked a very dumb question!

I just have a followup question: with the correct answer (C), are not we make an additional assumption that paying tax depends upon ''how many people eat in the restaurant''?

ReedArnoldMPREP · Answer

Again, be *very* specific about the needs of the question, based on what is asked, what the conclusion is, and what would ruin it!

Note that I was a little sloppy with this in my reply when I said "2). So what could possibly make up that 20K in restaurant tax...?"

See if you can figure out why that was *slightly* imprecise before reading on.

In short, I was sloppy because we don't need the full 20K to be 'made up' for the argument to fall apart.

The conclusion is that there will be a decline of ~20K in the restaurant tax, this argument falls apart if:

1). There is no decline at all, OR
2). There is a decline, but it is not ~20K dollars!

So, you were wondering, since you know Revenue = Price*Quantity, "What if the same number of people go to restaurants but spend less money than they would have." In that situation, true, there would still be a decline, but, unless their meals were *essentially free* (not a reasonable situation to consider), then the decline would not be ~20K, and the conclusion would be false. So the author must assume, in order for the decline of ~20K to remain, that the people who would have eaten at food trucks don't eat at other restaurants instead, because once they do so, either the decline would not happen at all, or, it would be less than ~20K dollars.

GmatKnightTutor · Answer

Being super careful that this is about LOCAL REVENUE FROM RESTAURANT TAXES declining could be helpful. Even if costs go up or down, that isn't really relevant unless we're talking about profit, for example. It's an interesting one and I can see why some of the answer choices could be tempting. The gmatknight blog goes over an assumption question but this could be helpful as well.

Waveton hosts an annual weeklong craft fair at which there are numerous food vendors. Food vendors are subject to the city's restaurant tax, and in a typical year the city collects about $ 20,000 in restaurant taxes from the fair's food vendors. Therefore, if the fair were to discontinue having food vendors, Waveton's revenue from the restaurant tax would decline by about $ 20,000.

Which of the following is an assumption on which the argument depends?

A) Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $ 20,000 a year.

Which of the following is an assumption on which the argument depends?

A) Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $ 20,000 a year. 
Nope. Here, we have some info regarding the cost of stuff. This doesn't impact the REVENUE side of things. I can understand why this may be tempting but even if we imagine the fair DID lose money by hosting these food vendors and spent $100,000 making their stalls every year, that still doesn't mean Waveton would lose around $20,000 in restaurant revenue tax necessarily. It'd lose public money due to cost (not revenue).

B) Attendance at the craft fair would not decline significantly if there were no food vendors there. 
Nope. This answer may trick a person into thinking that if people are STILL going to go to the fair (without any food vendors being there) and buy other stuff, that total revenue and therefore tax collected may still potentially be similar. But the argument is pretty precise that this is about Waveton's revenue from restaurant tax declining - not total tax.

C) Few people who eat food from the food vendors during the weeks of the crafts fair would eat at Waveton's restaurant instead if the food vendors were not available. 
This is the answer. I get the wording is a little unfriendly... but basically this is saying that  only a couple of people would eat at a local restaurant if the fair had no food . Imagine if that wasn't true! And that 99% of people would eat at a local restaurant if there was no food at the fair. Clearly, a lot of the lost tax revenue from food vendors at the fair would be made up by the local restaurant.

D) The food vendors at the crafts fair report their sales for the week of the fair accurately for the tax purposes. 
Kind of tricky... but it's probably worth mentioning that this isn't related to the core logic being used to justify the argument. The passage says revenue from food will fall if there is none offered at the fair. An assumption that cuts to the core of THAT argument is that people won't get food from outside the fair instead.

E) The average price of food purchased from the crafts fair's food vendors is significantly lower than the price of similar food eaten at the restaurants in Waveton. 
Nope. This may be a reason for why food at the fair is attractive but it's not something we NEED to assume. Even it was more expensive, people could still choose to eat food at the fair for the novelty or convenience of it. It's cheaper to eat at home but people may still choose to eat outside.

KarishmaB · Answer

Premises:

Waveton hosts an annual weeklong craft fair at which there are numerous food vendors. 
Food vendors are subject to the city's restaurant tax, and in a typical year the city collects about $ 20,000 in restaurant taxes from the fair's food vendors.

Conclusion:   If the fair were to discontinue having food vendors, Waveton's revenue from the restaurant tax would decline by about $ 20,000.

A craft fair is held. It has many food vendors too who have to pay restaurant tax. They collect 20k from food vendors at this fair.

Based of this, the author concludes that if the fair were to discontinue, revenue from restaurant tax will decline by $20k.

But there is a big assumption here, right? That the 20k in revenue from restaurant tax will not be made up for. Say usually people visit the fair and eat dinner there. If there are no food vendors, we are assuming that people will go home and cook. What if they decide to eat at a restaurant after the fair? To say that there will be a loss of 20k in revenue, we are assuming that people will not make up that revenue by going to the restaurant instead.

A) Providing appropriate facilities for the food vendors at the crafts fair costs Waveton less than $ 20,000 a year.

We are only talking about revenue of Waveton. Their costs are irrelevant here.

B) Attendance at the craft fair would not decline significantly if there were no food vendors there.

They may or may not. How does that impact revenue from restaurant tax? If food vendors are not allowed, it will still be a craft fair. Whether same number of people visit it or fewer, doesn't impact the revenue obtained from restaurant tax at all. It may impact the revenue of the craft sellers but that is out of scope for us.

C) Few people who eat food from the food vendors during the weeks of the crafts fair would eat at Waveton's restaurant instead if the food vendors were not available.

Correct. This is what we discussed above.

D) The food vendors at the crafts fair report their sales for the week of the fair accurately for the tax purposes.

Irrelevant. The collection is $20k, whether accurate or less. This will be the loss in revenue if there are no food vendors, supposedly.

E) The average price of food purchased from the crafts fair's food vendors is significantly lower than the price of similar food eaten at the restaurants in Waveton.

Irrelevant. Again, the actual price of food items at the cart don't matter. The point is will we lose the $20k collected in restaurant tax from the food vendor?

Answer (C)

Waveton hosts an annual weeklong craft fair at which there are

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Waveton hosts an annual weeklong craft fair at which there are

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