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# A myth in the ongoing debate about minimum wages is that raising minim

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A myth in the ongoing debate about minimum wages is that raising minim  [#permalink]

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Updated on: 15 Oct 2019, 03:16
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New Project RC Butler 2019 - Practice 2 RC Passages Everyday
Passage # 319, Date : 09-Sep-2019
This post is a part of New Project RC Butler 2019. Click here for Details

A myth in the ongoing debate about minimum wages is that raising minimum wages will necessarily increase a country's unemployment rate. While there are cases in which a marginal increase in wage rates might impact the operations of a company dramatically enough for the company to change its operations, in most companies, the cost increases of higher wages will tend to affect a company's bottom line without altering its staffing structure. For example, if a particular fast-food location operates at a particular time window with a staff of five people, then five must be the minimum staffing level for that business to achieve optimal results. In the case of a national fast-food chain, especially, these operational questions in general will already have been optimized. Even before rates are raised, managers of these locations have asked themselves whether they can afford to cut jobs and whether they are staffed at optimal levels (in this case, five people). A more specific calculation is needed. In this example, the precise question is how a marginal increase in staffing costs would compare to the decrease in business that would result in decreasing the staff level from five to four and serving food less quickly. The results of this analysis would not necessarily be consistent across industry, or even across markets and companies within an industry.

1. It can be inferred from the passage that, if two similar fast-food restaurants in different markets have different staffing levels, then

A. operations at one of the restaurants have not been optimized
B. differences in the markets place greater demands for fast serving on one restaurant than on the other
C. the restaurants pay their staff members at different average wage rates
D. the difference in time to serve food between the two locations more than compensates for the difference in total wages paid
E. one of the two restaurants will soon go out of business

2. According to the passage, which of the following statements is true of most companies?

A. If they are forced to raise wages, they will reduce staff size.
B. In order to be competitive, they must employ a staffing structure that need not change in the case of moderate wage increases.
C. If forced to raise wages, they will choose to allow their profits to decrease rather than reduce their number of employees.
D. They already tend to employ their staff at wage rates above the minimum wage.
E. Their wage practices are inconsistent between industries and even within a given industry.

3. Which of the following best describes the relationship of the discussion about fast-food restaurants to the passage as a whole?

A. It exemplifies a misconception mentioned earlier in the passage.
B. It exposes a contradiction between two ideas mentioned in the passage.
C. It serves as an example to support a claim made earlier in the passage.
D. It draws a comparison between two ideas described in the passage.
E. It exemplifies a theory that is refuted later in the passage.

4. The primary purpose of the passage is to

A. introduce an issue of national economic policy and suggest a possible solution
B. illustrate different types of impact of a potential policy change on different corporations
C. propose an alternative to a popular view in an ongoing policy debate
D. advocate a course of action to deal with an economic policy issue
E. point out a flaw in a common view involved in a policy debate

Source: GMAT Free (13)
Difficulty Level: 700

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Originally posted by SajjadAhmad on 09 Sep 2019, 06:43.
Last edited by SajjadAhmad on 15 Oct 2019, 03:16, edited 1 time in total.
Updated - Complete topic (1012).
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Re: A myth in the ongoing debate about minimum wages is that raising minim  [#permalink]

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12 Sep 2019, 20:06
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Can anybody explain the answers of the questions mentioned in the passage? Also please mention the difficulty level of the passage
GMAT Club team member
Status: GMAT Club Team Member
Affiliations: GMAT Club
Joined: 02 Nov 2016
Posts: 5887
GPA: 3.62
Re: A myth in the ongoing debate about minimum wages is that raising minim  [#permalink]

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13 Sep 2019, 02:10
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Official Explanation

1. It can be inferred from the passage that, if two similar fast-food restaurants in different markets have different staffing levels, then

Difficulty Level: 700

Explanation

This question asks us about something that is somewhat divergent from the example of the fast-food store in the passage, which focuses on a single store before and after a minimum wage hike. But the answer to this question will come from the passage, and the primary point made about fast-food restaurants is that their staffing is optimized. There is a secondary point, which is that "more specific calculations" can be made about how staffing adjustments would impact bottom line. Evaluating the answer choices for consistency with these points, we determine that (A) is out, as it directly contradicts the main idea of the passage.

Choice (B) is in line with the idea that they are optimized, so we'll keep it in for now.

Choice (C) contradicts the passage, which argues that staffing decisions are largely made based on operational need, not salary; therefore, there is no reason to believe (C), so it's out.

(D) sounds somewhat like the "more specific calculation" in the passage, so we can come back to it.

Choice (E) is too strong; the author does allow for the possibility that operations could differ at successful fast-food locations.

That leaves us with choices (B) and (D). Choice (D) makes a stronger claim, because it says that something "more than compensates" for something else. If this statement were true, one of the locations would be better optimized than the other, so it's contrary to the optimization idea--and, regardless, we don't know enough about these restaurants to make that kind of claim. We confirm that (B) expresses the idea that the locations are optimized.

The correct answer is (B).

2. According to the passage, which of the following statements is true of most companies?

Difficulty Level: 750

Explanation

This question asks us to make a general inference, so the author's main point can be our primary guide. We will look for a statement that must be true, according to the passage, since such a statement will be best supported.

Choice (A) is the opposite of the author's thesis, so it's out.

Choice (B) is a distortion of what the passage says. The passage claims that most companies will have optimized their staffing structure, but the invariability of their staffing structures in itself is not required by or helpful to their competitiveness. So (B) is out.

Choice (C) is implied by the passage, which says that a wage hike "will tend to affect a company's bottom line without altering its staffing structure".

(C) is looking good.

(D) makes a claim that is not clearly supported by the passage and probably contradicts the passage; for example, if (D) were true, companies would tend not to be affected by the wage hike and the claim in lines 7-10 would be contradicted, as the bottom line wouldn't be hit. So (D) is out.

Choice (E) also is a distortion of the passage. At the end of the passage, the author admits that there are differences between company practices and industries but makes a claim contrary to the idea that they are "inconsistent"; rather, they are different but consistent according to the "specific calculation" by which they are, generally, optimized. So (E) is out.

The correct answer is (C).

3. Which of the following best describes the relationship of the discussion about fast-food restaurants to the passage as a whole?

Difficulty Level: 600

Explanation

GMAT passages tend to be well-written in the respect that they tend to be free from irrelevant details; most details support the overall idea. In this case, the fast-food restaurant case gives an example that allows the author to describe how companies generally have optimized staffing, and the way in which that staffing is optimized means that they won't necessarily reduce staffing levels if minimum wages are raised. Let's do a pass through these answer choices and see which ones are consistent with that basic idea.

Choice (A) sounds about right, especially since "misconception" can refer to the "myth" described by the author.

(B) is out because the author doesn't describe a contradiction; as we pointed out in our first read, the author doesn't spend a lot of time describing the myth.

(C) is generic but doesn't appear to have an objective flaw. How does it compare to (A)? Looking back, we can see that (A) says that the fast-food example exemplifies a misconception, according to (A). But that's not accurate, because the example is an example of the reality, not the myth. So (A) is out and (C) is in.

(E) is out for reasons similar to (A). And there is no comparison of ideas, so (D) is out.

The correct answer is (C).

4. The primary purpose of the passage is to

Difficulty Level: 650

Explanation

This question asks us something we know: the primary purpose of the passage is to debunk a myth. Only answer choice (E) captures this basic point.

Choices (A), (C) and (D) all describe the author as advocating a solution, but the other doesn't do that. The author never even comes out and says, for example, that the minimum wage should be raised.

Choice (B) is less wrong, but still flawed in that it's not the main point of the passage to describe the impact of a change in rate. Rather, the impact of the change is described in order to debunk the myth.

The correct answer is (E)

Hope it helps

PallabiKundu wrote:
Can anybody explain the answers of the questions mentioned in the passage? Also please mention the difficulty level of the passage

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Re: A myth in the ongoing debate about minimum wages is that raising minim   [#permalink] 13 Sep 2019, 02:10

# A myth in the ongoing debate about minimum wages is that raising minim

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