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# *700* A gas tax of one cent per gallon would raise one billion

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A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 02:11
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A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.

Which one of the following most clearly identifies an error in the author‟s reasoning?

(A) The author cites irrelevant data.
(B) The author relies on incorrect current consumption figures.
(C) The author makes incompatible assumptions.
(D) The author mistakes an effect for a cause.
(E) The author appeals to conscience rather than reason.

CONFUSE b\w A & C
[Reveal] Spoiler: OA

Last edited by broall on 16 May 2017, 22:05, edited 1 time in total.
Reformatted question

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 07:04
C -mthe author says rise will increase the fund avilable. He also says there will be a reduction in usage. Both contradicts
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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 07:24
aimkp wrote:
A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.
Which one of the following most clearly identifies an error in the author‟s reasoning?
(A) The author cites irrelevant data.
(B) The author relies on incorrect current consumption figures.
(C) The author makes incompatible assumptions.
(D) The author mistakes an effect for a cause.
(E) The author appeals to conscience rather than reason.

CONFUSE b\w A & C

IMO C.

In this CR, I see the options as,
A - Cannot say that author cites irrelevant data - Increase in price by 1 cent will result in x amount. Increase in price by 50x cent will result in 50x amount - I see this is relevant. Also, price rise will reduce usage is also relevant. - Incorrect
B - Cannot say this.. - Incorrect
C - Assumptions are wrong - Even a 1 cent increase will reduce consumption, at the same time 50 cent increase will not reduce consumption. So the author may not be able to comment on the consumption and ecological point.
D - I initially thought of this - but later realized wrong - Incorrect.
E - Incorrect.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 08:33
Answer D is correct, all others are incorrect (went for D myself initially). The author is using incompatible assumptions because the author says a 50 cent gas tax increase would help decrease the budget deficit, but then turns around and say demand will decrease and this would help the environment hence budget is not alleviated. You can't have it both ways.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 08:49
gettinit wrote:
Answer D is correct, all others are incorrect (went for D myself initially). The author is using incompatible assumptions because the author says a 50 cent gas tax increase would help decrease the budget deficit, but then turns around and say demand will decrease and this would help the environment hence budget is not alleviated. You can't have it both ways.

Hello gettinit - you meant the answer is C? or D? - Your explanations refer to C....

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 11:39
Has to be C, as everyone else seems to have explained.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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08 Dec 2010, 19:25
gmatin - you are correct sorry must have been typing too fast. Yes I meant C. sorry for the confusion.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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05 Feb 2012, 11:56
C it is
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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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17 Feb 2012, 14:58
I was confused between C and D and finally choose D, why is D incorrect?

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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17 Feb 2012, 15:07
Reasoning for C:

Assumption 1: When Tax increases, the consumption remaining the same, the overall Tax collected would increase and hence the budget deficit issue resolved.

If consumption reduces, even though the Tax per Unit has increases there is no guarantee, the overall Tax will increase.

Assumption 2: When Tax increases, the consumption will reduce and hence the use of fuel and our dependency on other countries for fuel will deduce.

Assumption-1 and Assumption-2 are incomparable.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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19 Feb 2012, 22:23
+1 for C
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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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20 Feb 2012, 00:38
I think the correct answer is C as it rightly mentions that the author makes incompatible assumptions.
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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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15 Feb 2013, 00:04
aimkp wrote:
A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.
Which one of the following most clearly identifies an error in the author‟s reasoning?
(A) The author cites irrelevant data.
(B) The author relies on incorrect current consumption figures.
(C) The author makes incompatible assumptions.
(D) The author mistakes an effect for a cause.
(E) The author appeals to conscience rather than reason.

CONFUSE b\w A & C

C seems to win by POE.
D is good distraction though, since mostly flaw questions mess up with cause and effect. But on close observation we can see that the cause and effect are not reversed.
Increase in taxes causes increased federal revenue.
Increase in taxes may cause people to decrease gasoline consumption.
Hence cause and effect are correctly stated.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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15 Feb 2013, 07:16
Author seems to assume to polar opposite aspects of an effect.
First he considers with increase in tax budget deficit will decrease ie. he assumes people will continue buying at the same rate as they are buying now.
Second is With increase in tax , people will consume less gas and hence therefore decrease the foreign dependency on the gas..
Hence, for the same cause he assumes to polar opposite assumptions.

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*700* A gas tax of one cent per gallon would raise one billion [#permalink]

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17 Apr 2015, 10:25
Expert's post
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This post was
BOOKMARKED
A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.

Which one of the following most clearly identifies an error in the author‟s reasoning?

(A) The author cites irrelevant data.

(B) The author relies on incorrect current consumption figures.

(C) The author makes incompatible assumptions.

(D) The author mistakes an effect for a cause.

(E) The author appeals to conscience rather than reason.
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Re: *700* A gas tax of one cent per gallon would raise one billion [#permalink]

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18 Apr 2015, 01:45
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A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit.
Assumption#1: The price increase would not decrease the demand.

This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.
Assumption#1: There will be decrease in the demand.

Which one of the following most clearly identifies an error in the author‟s reasoning?

(A) The author cites irrelevant data.

(B) The author relies on incorrect current consumption figures.

(C) The author makes incompatible assumptions.

(D) The author mistakes an effect for a cause.

(E) The author appeals to conscience rather than reason.
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Re: *700* A gas tax of one cent per gallon would raise one billion [#permalink]

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18 Apr 2015, 05:06
The answer C is perfect here. The thought process is as follows.

1. Option A: An irrelevant data is clearly irrelevant to this question

2. Option B: We do not what the current or the old consumption figures, hence irrelevant.

3. Option E: Appeals to conscience rather than reason. This option is irrelevant or beyond the scope.

Left are C and D.

C: Author make incorrect assumptions- [Keep]- reasoning being... as the demand for gasoline decreases, then people would start using fewer liters of gas and hence less revenue generation. Goal unachived.

D: Option D: May be kind of true, but what is effect and what is the cause? Out of scope.

souvik101990 wrote:
A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.

Which one of the following most clearly identifies an error in the author‟s reasoning?

(A) The author cites irrelevant data.

(B) The author relies on incorrect current consumption figures.

(C) The author makes incompatible assumptions.

(D) The author mistakes an effect for a cause.

(E) The author appeals to conscience rather than reason.

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Re: *700* A gas tax of one cent per gallon would raise one billion [#permalink]

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18 Apr 2015, 06:51
C is best.

Plan: At current consumption rate, a tax of fifty cents per gallon would raise fifty billion dollars per year
Goal: deal with the federal budget deficit

Assumption: consumption remains same.

Additional advantage: resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers. This advantage will contradict the assumption as decrease in demand means decrease in consumption and hence decrease in revenues. So plan won't meet the goal.

Hence, C
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Re: *700* A gas tax of one cent per gallon would raise one billion [#permalink]

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04 Jan 2016, 20:09
souvik101990 wrote:
A gas tax of one cent per gallon would raise one billion dollars per year at current consumption rates. Since a tax of fifty cents per gallon would therefore raise fifty billion dollars per year, it seems a perfect way to deal with the federal budget deficit. This tax would have the additional advantage that the resulting drop in the demand for gasoline would be ecologically sound and would keep our country from being too dependent on foreign oil producers.

the conclusion here:
GT of 50c - perfect way to deal with FBD.
this will lead to lower demand and thus, preserve the nature and reduce the dependence on foreign oil.

the flaw here is that the author makes 2 incompatible assumptions. it is mentioned "current consumption rates", thus, if the demand decreases, there is NO WAY to make 50B \$ from the tax.

Which one of the following most clearly identifies an error in the author‟s reasoning?

(A) The author cites irrelevant data.
we cannot say that.

(B) The author relies on incorrect current consumption figures.
current consumption is not at issue here.

(C) The author makes incompatible assumptions.
exactly! gvt wants to make 50B \$ (at current consumption), while wanting to decrease the demand.

(D) The author mistakes an effect for a cause.
what is the effect? dropped demand? what is the cause? 50b \$? can't figure out which is which, and C is way better than this one.

(E) The author appeals to conscience rather than reason.
no, he does reason, stating facts!!! but the way of thinking is flawed.

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Re: A gas tax of one cent per gallon would raise one billion [#permalink]

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24 Jun 2017, 18:49
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Re: A gas tax of one cent per gallon would raise one billion   [#permalink] 24 Jun 2017, 18:49

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