Chembeti
A design flaw in deep-sea research submarines has led to the failures of many research projects. These projects are insured against such losses; as a result, claims against policies underwriting deep-sea research projects have increased greatly. Insurance premiums for these projects have been raised in response to these higher claims. These cost increases have led research institutions to try to accomplish more research with fewer research projects.
Which of the following, if true, taken together with the information above, best supports the conclusion that the cost of conducting deep-sea research will continue to rise?
took me 2:34 to solve, but struggled between A and C. here's my take on it.
Stimulus given above is a fact set with conclusion in the question stem : cost of conducting deep sea research will continue to rise.
fact 1 : design flaw led to failure in many research projects.
fact 2 : claims against policies underwriting deep sea research have increased.
fact 3 : premiums have been raised in response
sub conclusion : these increased premiums have led to more research in fewer projects.
so correct answer could either show increased failure rate of project having more research OR will show that insurance premium will rise based on amount of work involved in a project.
A. Since the risk to insurers of underwriting research is spread over relatively few projects, insurance premiums are necessarily very high.
could be kept as a contender. B. When research projects fail, the causes of failure are generally impossible to pinpoint with accuracy.
this does not have any impact on cost of premiums. hence out of scopeC. The greater the research demands placed on a given project, the more likely that project will fail.
this leads to further increase in insurance premium due to increased failure rate and hence greater cost in conducting research. Correct answerD. Most research institutions undertake so few projects that no economies of scale can be realized.
economies of scales on undertaking research has no role in premiums paid for individual project. hence out of scopeE. Since many research projects are undertaken by coalitions of research institutions, inefficiencies are inevitable.
[color=#FF0000]out of scope[/color]
finally out of A and C, I choose C because it impacts conclusion much more directly. Though not very much convinced