Some analysts maintain that an embargo by country Litora on

Oldest

Best Reply

Author

Message

TAGS:

Director

Joined: 05 May 2003

Posts: 560

Location: Aus

Followers: 2

Kudos [?]: 3 [0], given: 0

Some analysts maintain that an embargo by country Litora on [#permalink]

22 Dec 2003, 10:24

00:00

Question Stats:

100% (00:00) correct

0% (00:00) wrong

based on 1 sessions

Some analysts maintain that an embargo by country Litora on the export of a strategic metal to country Zenda, if imposed, would drive up the price of the metal in Zenda at least tenfold. They note that few other countries export the metal and that, with an embargo. Zenda might have to depend on asтАФyet тАУ unexploited domestic sources of the metal.

Which of the following, if true, constitutes the most serious objection to the analysis above ?

(A) LitoraтАЩs economy depends heavily on foreign currency earned by the export of the strategic metal to other countries.

(B) There are foreign-policy steps that Zenda could take to appease Litora and avoid being subjected to an embargo on the metal.

(C) Geologists believe that additional deposits of the metal could possibly be found with in the territory of Litora.

(D) Only a small proportion of ZendaтАЩs import expenditures is devoted to the import of the metal from Litora.

(E) In case of an embargo, Zenda could buy the metal indirectly from Litora on the world market at a lessthan one-third increase in cost.

Please explain ?

Senior Manager

Joined: 29 Aug 2003

Posts: 327

Location: MI

Followers: 1

Kudos [?]: 1 [0], given: 0

[#permalink]

22 Dec 2003, 11:18

E

Only E explains why the cost of metal will not go tenfold in Zenda.

CEO

Joined: 15 Aug 2003

Posts: 3549

Followers: 55

Kudos [?]: 627 [0], given: 781

Re: CR - Country Litora [#permalink]

22 Dec 2003, 11:37

Geethu wrote:

Some analysts maintain that an embargo by country Litora on the export of a strategic metal to country Zenda, if imposed, would drive up the price of the metal in Zenda at least tenfold. They note that few other countries export the metal and that, with an embargo. Zenda might have to depend on asтАФyet тАУ unexploited domestic sources of the metal.

Which of the following, if true, constitutes the most serious objection to the analysis above ?

(A) LitoraтАЩs economy depends heavily on foreign currency earned by the export of the strategic metal to other countries.
(B) There are foreign-policy steps that Zenda could take to appease Litora and avoid being subjected to an embargo on the metal.
(C) Geologists believe that additional deposits of the metal could possibly be found with in the territory of Litora.
(D) Only a small proportion of ZendaтАЩs import expenditures is devoted to the import of the metal from Litora.
(E) In case of an embargo, Zenda could buy the metal indirectly from Litora on the world market at a less than one-third increase in cost.

Please explain ?

Analysis : Embargo will drive up price of metal and will force Zenda to look for domestic sources for the metal.

I think A

A says, Litora cannot afford to impose the embargo..so the analysis is
based on a very unlikely situation.

I liked E too.
But 'E' still results in an increase in cost and Zenda may STILL find it cheaper to look for domestic sources. OR Zenda will buy from the world market... but "could" in E makes it weaker than A.

Senior Manager

Joined: 29 Aug 2003

Posts: 327

Location: MI

Followers: 1

Kudos [?]: 1 [0], given: 0

Re: CR - Country Litora [#permalink]

22 Dec 2003, 11:52

praetorian123 wrote:

A says "export to countries" not specifically Zenda.

Stimulus says that "would drive up the price of the metal in Zenda AT LEAST TENFOLD"
Only E gives a reason to think it won't.

SVP

Joined: 30 Oct 2003

Posts: 1963

Location: NewJersey USA

Followers: 3

Kudos [?]: 25 [0], given: 0

[#permalink]

21 Jan 2004, 06:23

I will stick with E

Manager

Joined: 26 Dec 2003

Posts: 238

Location: India

Followers: 1

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

[#permalink]

21 Jan 2004, 16:35

Another for E?

SVP

Joined: 16 Oct 2003

Posts: 1957

Followers: 2

Kudos [?]: 15 [0], given: 0

[#permalink]

23 Jan 2004, 21:18

E Final Answer

(E) In case of an embargo, Zenda could buy the metal indirectly from Litora on the world market at a lessthan one-third increase in cost.

This clearly denies the conclusion that Zenda has to depend on domestic unexploited source.

[#permalink] 23 Jan 2004, 21:18

	Similar topics	Author	Replies	Last post
Similar Topics:	For a trade embargo against a particular country to	Vicky	5	01 Oct 2003, 09:59
	Some analysts maintain that an embargo by country Litora on	nakib77	6	15 Oct 2005, 05:48
	Some analysts maintain that an embargo by country Litora on	Riuscita	4	03 Apr 2006, 22:08
	Some analysts maintain that an embargo by country Litora on	vshaunak@gmail.com	4	03 May 2007, 02:53
	Some analysts maintain that an embargo by country Litora on	noboru	6	22 Aug 2009, 11:14

Main navigation

GMAT Resources

Partners

MBA Resources

GMAT ® is a registered trademark of the Graduate Management Admission Council ® (GMAC ®). GMAT Club's website has not been reviewed or endorsed by GMAC.

GMAT Courses

Admissions Consulting

Some analysts maintain that an embargo by country Litora on

Some analysts maintain that an embargo by country Litora on

Main navigation

GMAT Resources

Partners

MBA Resources