The people of Prohibitionland are considering banning the : GMAT Critical Reasoning (CR)
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# The people of Prohibitionland are considering banning the

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Manager
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The people of Prohibitionland are considering banning the [#permalink]

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16 Nov 2009, 12:20
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The people of Prohibitionland are considering banning the service of alcoholic beverages in restaurants to curb unruly behavior on the part of its residents. Proprietors of restaurants in Prohibitionland are protesting the ban on the grounds that it will reduce their revenues and profits. However, several provinces in Prohibitionland enacted restrictions on alcoholic beverages last year, and the sales taxes paid by the restaurants in those provinces rose by an average of 50 percent. In contrast, the sales taxes paid by restaurants located in areas of Prohibitionland that did not have any restrictions rose by an average of 30 percent.

Which of the following, if true, supports the restaurant proprietors’ economic stance against the ban?

A. In the provinces that restricted alcoholic beverages, there was a short-term negative impact on restaurant visitation in the beginning of last year.

B. The sales tax in Prohibitionland is lower on food and beverages than it is on other consumer goods, such as clothing.

C. The consumption of alcoholic beverages in Prohibitionland has been on a gradual decline the last 20 years.

D. The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.

E. Overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions on alcoholic beverages than in the rest of Prohibitionland last year.
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Manager
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17 Nov 2009, 01:57
Pick D here.
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17 Nov 2009, 03:38

A. In the provinces that restricted alcoholic beverages, there was a short-term negative impact on restaurant visitation in the beginning of last year.

B. The sales tax in Prohibitionland is lower on food and beverages than it is on other consumer goods, such as clothing.
-Out of scope

C. The consumption of alcoholic beverages in Prohibitionland has been on a gradual decline the last 20 years.

D. The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.
-By converting restriction to complete ban the revenues of restaurant proprietors would be hurt. Hence the answer

E. Overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions on alcoholic beverages than in the rest of Prohibitionland last year.
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17 Nov 2009, 06:45
I believe i saw this question in a MGAT cat exam.
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17 Nov 2009, 08:37
Yup it's from MGMAT.

OA is D.
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19 Nov 2009, 14:51
That is correct. I remember getting this one incorrect.
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27 Nov 2009, 01:02
D is correct
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27 Nov 2009, 10:19
D is correct. I believe I have the explanation on one of my old MGMAT cat exams.
Re: Prohibitionland   [#permalink] 27 Nov 2009, 10:19
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