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VP
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Studies in restaurants show that the tips left by customers [#permalink]
 16 Sep 2004, 17:30
Question Stats:
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Studies in restaurants show that the tips left by customers who pay their bill in cash tend to be larger when the bill is presented on a tray that bears a credit-card logo.
Consumer psychologists hypothesize that simply seeing a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their spending power exceeds the cash they have immediately available.
Which of the following, if true, most strongly supports the psychologists’ interpretation of the studies?
A. The effect noted in the studies is not limited to patrons who have credit cards.
B. Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented with a restaurant bill on a tray with credit-card logo than when the tray has no logo.
C. In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards.
D. In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card.
E. The percentage of restaurant bills paid with given brand of credit card increases when that credit card’s logo is displayed on the tray with which the bill is prepared.
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GMAT Club Legend
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A it is. It is a generalization of the theory at hand. E was confusing but does not address the issue of tipping. Instead, it answers the question of credit card payment upon seeing the shown logo
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Best Regards,
Paul
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VP
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IMO the answer should be B
The fundamental import behind the psychologists' conclusion in the study hinges on the fact that the customers are impacted by seeing the logo of the credit card on the tray. For the impact to be true it should impact both positively and negatively. Thus when it impacts positively - customers with good financial reputations pay more tip because they are reminded of their increased spending power by the the credit card logo. Similarly, if customers are in credit card debt, then the same logo should remind them of their financial woes and hence dissuade them from tipping more.
Thus B which brings this element supports the psychologists' hypothesis.
Please post the right answer.
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GMAT Club Legend
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I can't refute what you said dwivedys. I agree with you. It isolates the component of purchasing power as the prime determinant of the amount of tips given when someone is presented a tray with a credit card logo
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Best Regards,
Paul
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Senior Manager
Joined: 21 Jun 2004
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A it is.
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510 on my first GMAT. 610 on second GMAT.!
The struggle continues.
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Director
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I think it should be B.
A is out of scope since the discussion is about a credit card holder seeing the logo and spending cash.
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Director
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I think it's B
B strengthens the relationship of logo and the feeling of spending power. People on debt will obviously have a negative feeling abt their spending power and will be turned off by the logo
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SVP
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Clearly B for me.
When the patrons are not under pressure they spend lavishly and when they are under pressure (after seeing the logo bills are reminded), the circimstance reminds them of thier financial conditions.
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VP
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Thank you
the answer is B
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