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Situation: In the island nation of Bezun, the government

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Situation: In the island nation of Bezun, the government [#permalink] New post 11 May 2005, 14:58
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A
B
C
D
E

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(N/A)

Question Stats:

100% (01:05) correct 0% (00:00) wrong based on 9 sessions
25. Situation: In the island nation of Bezun, the government taxes gasoline heavily in order to induce people not to drive. It uses the revenue from the gasoline tax to subsidize electricity in order to reduce prices charged for electricity.

Analysis: The greater the success achieved in meeting the first of these objectives, the less will be the success achieved in meeting the second.
The analysis provided for the situation above would be most appropriate in which one of the following situations?

(A) A library charges a late fee in order to induce borrowers to return books promptly. The library uses revenue from the late fee to send reminders to tardy borrowers in order to reduce the incidence of overdue books.
(B) A mail-order store imposes a stiff surcharge for overnight delivery in order to limit use of this option. The store uses revenue from the surcharge to pay the extra expenses it incurs for providing the overnight delivery service.
(C) The park management charges an admission fee so that a park’s users will contribute to the park’s upkeep. In order to keep admission fees low, the management does mot finance any new projects from them.
(D) A restaurant adds a service charge in order to spare customers the trouble of individual tips. The service charge is then shared among the restaurant’s workers in order to augment their low hourly wages.
(E) The highway administration charges a toll for crossing a bridge in order to get motorists to use other routes. It uses the revenue from that toll to generate a reserve fund in order to be able one day to build a new bridge.
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Re: Situation: In the island nation of Bezun, the government [#permalink] New post 26 Feb 2013, 07:58
I think the correct answer is A.

Quote:
the government taxes gasoline heavily in order to induce people not to drive.
The government is discouraging citizens by increasing cost.

Quote:
It uses the revenue from the gasoline tax to subsidize electricity in order to reduce prices charged for electricity.
Then the government is using that money to decrease the electricity cost for the citizens.

Quote:
(A) A library charges a late fee in order to induce borrowers to return books promptly. The library uses revenue from the late fee to send reminders to tardy borrowers in order to reduce the incidence of overdue books.

Increases borrowers' cost, then tries to decrease borrowers cost.

Quote:
(B) A mail-order store imposes a stiff surcharge for overnight delivery in order to limit use of this option. The store uses revenue from the surcharge to pay the extra expenses it incurs for providing the overnight delivery service.
Increases customers' cost, then tries to decrease their own cost.

Quote:
(C) The park management charges an admission fee so that a park’s users will contribute to the park’s upkeep. In order to keep admission fees low, the management does mot finance any new projects from them.
Increases public's cost, then does nothing.

Quote:
(D) A restaurant adds a service charge in order to spare customers the trouble of individual tips. The service charge is then shared among the restaurant’s workers in order to augment their low hourly wages.
Increases customers' cost, then tries to decrease restaurant's cost (wages).

Quote:
(E) The highway administration charges a toll for crossing a bridge in order to get motorists to use other routes. It uses the revenue from that toll to generate a reserve fund in order to be able one day to build a new bridge.
Increases commuters' cost, plans to build a bridge. But no mention whether the bridge will cost less for the commuters.
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Re: Situation: In the island nation of Bezun, the government [#permalink] New post 26 Feb 2013, 20:33
Expert's post
WinWinMBA wrote:
25. Situation: In the island nation of Bezun, the government taxes gasoline heavily in order to induce people not to drive. It uses the revenue from the gasoline tax to subsidize electricity in order to reduce prices charged for electricity.

Analysis: The greater the success achieved in meeting the first of these objectives, the less will be the success achieved in meeting the second.
The analysis provided for the situation above would be most appropriate in which one of the following situations?

(A) A library charges a late fee in order to induce borrowers to return books promptly. The library uses revenue from the late fee to send reminders to tardy borrowers in order to reduce the incidence of overdue books.
(B) A mail-order store imposes a stiff surcharge for overnight delivery in order to limit use of this option. The store uses revenue from the surcharge to pay the extra expenses it incurs for providing the overnight delivery service.
(C) The park management charges an admission fee so that a park’s users will contribute to the park’s upkeep. In order to keep admission fees low, the management does mot finance any new projects from them.
(D) A restaurant adds a service charge in order to spare customers the trouble of individual tips. The service charge is then shared among the restaurant’s workers in order to augment their low hourly wages.
(E) The highway administration charges a toll for crossing a bridge in order to get motorists to use other routes. It uses the revenue from that toll to generate a reserve fund in order to be able one day to build a new bridge.


This is a 'mimic the reasoning' question. (The second M of SWIMMER if you are aware of our SWIMMER technique)

Let's first understand what is the 'Analysis' they mention.

Analysis: The greater the success achieved in meeting the first of these objectives, the less will be the success achieved in meeting the second.

Which two objectives are they talking about?
1. Induce people to not drive
2. Reduce electricity rates

They use the taxes they collect on gasoline to provide subsidy on electricity. What happens if they are very successful in their first objective? i.e. people minimize driving? Then consumption of gasoline will be minimum and tax collected will be minimum too. Then, their second objective will not be met since they won't have any money to give subsidy on electricity. So greater success in first objective implies lesser in the second.

We are looking for an option that provides two objectives such that more success in one leads to less success in the other.

(A) A library charges a late fee in order to induce borrowers to return books promptly. The library uses revenue from the late fee to send reminders to tardy borrowers in order to reduce the incidence of overdue books.

Here, first objective and second objective are related. They are 'induce borrowers to return books on time' and 'reduce the incidence of overdue books'. Success in one leads to success in the other. Doesn't mimic the reasoning.

(B) A mail-order store imposes a stiff surcharge for overnight delivery in order to limit use of this option. The store uses revenue from the surcharge to pay the extra expenses it incurs for providing the overnight delivery service.

The first objective is to limit use of overnight delivery. There is no other distinct objective. Doesn't mimic the reasoning.

(C) The park management charges an admission fee so that a park's users will contribute to the park's upkeep. In order to keep admission fees low, the management does not finance any new projects from them.

Two objectives are not there. Doesn't mimic the reasoning.

(D) A restaurant adds a service charge in order to spare customers the trouble of individual tips. The service charge is then shared among the restaurant's workers in order to augment their low hourly wages.

More success in one objective leads to more success in the other. If service charge is added on more checks, workers' wages will be augmented more. Doesn't mimic the reasoning.

(E) The highway administration charges a toll for crossing a bridge in order to get motorists to use other routes. It uses the revenue from that toll to generate a reserve fund in order to be able one day to build a new bridge.

Two objectives:
Make motorists use other routes
Build a new bridge

If the admin achieves more success in the first objective and people start using the other routes, the admin will not collect enough money to build another bridge. So more success of one leads to less success of another. Hence this mimics the reasoning.

Answer (E)
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Re: Situation: In the island nation of Bezun, the government   [#permalink] 26 Feb 2013, 20:33
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