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Studies in restaurants shows that the tips left by customers

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Studies in restaurants shows that the tips left by customers [#permalink] New post 02 Jun 2010, 07:28
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Studies in restaurants shows 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 remains them that their spending power exceeds the cash they 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 posses credit card.
(D) In general, restaurant patrons who pay their bills in cash leaves larger tips than do those who pay by credit card.
(E) The percentage of restaurant bills paid with a given brand of credit card increases when that credit card's logo is displayed on the tray with which the bill is presented.
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 02 Jun 2010, 13:30
B because it strengthens the assumption that seeing the credit card logo reminds people of their spending limit.
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 02 Jun 2010, 18:10
I'll go with B

OA please?

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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 02 Jun 2010, 23:26
Can u please explain... I don't understand the logic.As per the argument seeing credit card logo make people feel more about their spending power. But choice B say that on seeing Credit card logo they tip less thinking about their financial obligations.

The OA is B
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 03 Jun 2010, 07:35
pheonix wrote:
Can u please explain... I don't understand the logic.As per the argument seeing credit card logo make people feel more about their spending power. But choice B say that on seeing Credit card logo they tip less thinking about their financial obligations.

The OA is B


The main point to ponder here is that seeing a credit card logo has an effect on the customer.
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 03 Jun 2010, 09:25
Got it.Thanks alot.
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 05 Jun 2010, 09:16
can someone explain why (E) is incorrect....if we are talking about the effect of credit card logo on the customers.
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Re: OG 12 Doubt. CR Q 94. [#permalink] New post 29 Jun 2010, 18:54
seekmba wrote:
can someone explain why (E) is incorrect....if we are talking about the effect of credit card logo on the customers.


Option E talks about Bills not Tip.

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Re: Studies in restaurants shows that the tips left by customers [#permalink] New post 29 Mar 2013, 17:53
I originally had B as weakening the argument, and E as the correct answer. After reading the post, I can see why B can be correct, Im still having an issue seeing it in the argument, the question states that many credit card holders willing to spend more because it reminds them.....(first question, is this the conclusion?, second, the effect is there by the use of the logo on the tray, but the tip is less? Can you clarify what the Conclusion, and what the premise is? Maybe I'm confusing the (p) as the (c)?
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Re: Studies in restaurants shows that the tips left by customers [#permalink] New post 27 Apr 2013, 06:25
By eliminating options, i got option B. But i didn't understand how B is strengthening the conclusion. Can someone explain ?
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Re: Studies in restaurants shows that the tips left by customers [#permalink] New post 27 Apr 2013, 07:02
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Hi,

B supports the argument because it provides more evidence that the credit card logo had an effect.

If it can be shown that people who have debts on credit cards pay less, it would support the fact that those with available credit on cards would pay more...

Does that make sense?

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Re: Studies in restaurants shows that the tips left by customers [#permalink] New post 29 Apr 2013, 22:18
plumber250 wrote:
Hi,

B supports the argument because it provides more evidence that the credit card logo had an effect.

If it can be shown that people who have debts on credit cards pay less, it would support the fact that those with available credit on cards would pay more...

Does that make sense?

James



hi,

for options b and e, both support that credit card logo will have some effect on customers, e says, a specific logo increases the sales,
and b says, ppl who have obligations will pay less, but none of them clearly tells, at which point do, ppl pay more tips. though w can infer from option B.
but can this be a reason to eliminate E ???
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Re: Studies in restaurants shows that the tips left by customers [#permalink] New post 29 Apr 2013, 22:26
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I think I'll add my two cents to the discussion.

Let's start with understanding the passage.

Argument Analysis

My very first observation of the given passage is that it is a causal argument. A causal argument is one in which we attribute the cause of some past event, say X, to some past event or a rule or something else, say Y. In other words, we say that X has caused Y or that X led to Y

In the given argument, we have

Y: 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
X: 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

As we can see, even X has a causal structure and can be written as:
Credit card reminds credit card holders that their spending power exceeds the cash they have immediately available ---->> (leads to) seeing a credit-card logo makes many credit-card holders willing to spend more ---->>> the tips left by customers who pay their bill in cash is larger when the bill is presented on a tray that bears a credit-card logo

In essence, the hypothesis is that that credit card reminds people of their high spending power - this leads them to spend more - this leads in higher tips.

Prethinking

This is a strengthen question, as is clear from the question stem. We need to strengthen the psychologist's hypothesis. Since this is causal argument where we say that X is the reason for Y, we can strengthen it by saying that
1. There is no Z which can be the reason for Y OR
2. If we increase X while keeping everything else same, we'll increase Y - This could be indicated by saying that when customer see the credit card logo of the company they hold credit card of, they tip more than that when they see credit card logos of other companies.
3. IF we remove X while keeping everything else same, we'll not have Y - i.e. if the credit card logo doesn't remind people of their higher purchasing power, they would not tip higher.

With this pre-thinking, let's move over to the option statements:

Analysis of option statements

A. The effect noted in the studies is not limited to patrons who have credit cards. - Ok. But do people who don't have credit cards tip higher or lower than people with credit cards? The option statement doesn't provide this. Without this information, this statement doesn't have an impact on the hypothesis. If it had stated that people without credit cards tip lower than others when presented with trays with credit card logo, then it would have strengthened the hypothesis.

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. - This is interesting. This says that guys under credit card obligations tend to tip less when presented with trays with credit card logo. This kind of guy has lesser spending power than his available cash, exactly opposite to the case considered in the argument and this guy tips less, which is also exactly opposite the case in the argument. This kind of behavior is expected if the hypothesis holds. Since the hypothesis says that credit card logo reminds one of his spending power - a guy with good credit limit and low credit card obligations is expected to spend more and a guy with high credit card obligations is expected to spend less. Therefore, the given statement provides an evidence that the hypothesis holds in a different scenario. Therefore, this is the CORRECT option.

C. In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards. - This actually weakens the hypothesis. If a guy doesn't have a credit card, how would a credit card logo remind him of his higher spending power?

D. In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card. - This is irrelevant comparison. We are not concerned with the payment method here.

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. - Again, we are not concerened how the payment is made.

Therefore, the correct choice is Option B.

Hope this helps :)

Thanks,
Chiranjeev

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Re: Studies in restaurants shows that the tips left by customers   [#permalink] 29 Apr 2013, 22:26
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