While this is an old post, it represents an issue that impacts many Test Takers. Permutations and Combinations are relatively rare categories on Test Day. You'll probably see at least 1 of each, but even if you're performing really well in the Quant section you likely won't see more than 2-3 of each. While they generally appear as higher-level concepts, some of these questions are rather easy to solve IF you understand how the math "works."
The 'big' difference between these two question types is about 'order' - when reading through the question, you have to ask yourself IF order 'matters'. If it does, then it's a Permutation question; if it does NOT, then it's a Combination question. Thankfully, the questions themselves often offer clues (e.g. the word "arrangement" means Permutation, the word "combinations" means Combination).
The first example isn't written very clearly, since it does not describe how the chairs are arranged. If they're in a row, then THAT fact (combined with the word "arrangements") makes this a pretty straight-forward Permutation question. However, if the chairs were arranged around a table (for example), then the math that you would have to do would differ ('circular arrangements' are more complex).
In the second example, we're forming "teams" without granting any individual person a special "title/rank." In this situation, we're grouping people, so the group ABCD is the same as the group BCAD. In this way, order does NOT matter and we have a Combination question.
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