A small country, Country S, has instituted a hefty tax on

Question

A small country, Country S, has instituted a hefty tax on imported electronics in an attempt to protect the largest company and employer in the country. As a result of this import tax, the national electronics company is now able to compete in the electronics market.

Which of the following can be inferred from the information above?
 
 
A- Only small quantities of electronics from companies outside of Country S will now be sold in Country S.
 
B- To take further advantage of the import tax, the national electronics company will expand its product line.
 
C- Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.
 
D- Electronics are cheaper to produce outside Country S than inside Country S. 
 
E- The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.
 
 


I know the answer, but how can you infer this?

trivikram · Answer

D <img src="{SMILIES_PATH}/icon_biggrin.gif" alt=":-D" title="Very Happy" />

ricokevin · Answer

If electronics are cheaper to produce outside, then those electronics imported will be cheaper compared to those produced domestically. (Hence customers will buy imported ones over domestic ones) One of the ways to make imports expensive is to tax them. If, due to tax, imports become expensive, then the national electronics company would be able to sell more of its own...

It can then compete on grounds other than price.

josevsilva · Answer

D is the only true statement that can be infered based on the arguments information.

IHATEMELGIBSON1 · Answer

Did you look at the answers and work backwards? Or did you guess based on the passage with no assumptions or conclusions?

IHATEMELGIBSON1 · Answer

and how do you know that cheaper to produce correlates with cheaper price? I thought you couldn't assume normal economics things

ng · Answer

D.

surbab · Answer

The answer can be A or D.

Since A uses extreme language, and which we cannot really infer from the passage I pick D!!!

anandsebastin · Answer

A- Only small quantities of electronics from companies outside of Country S will now be sold in Country S.
 No basis for statement. Maybe equal quantities maybe sold of both imported and locally manufacture electronics.
 
B- To take further advantage of the import tax, the national electronics company will expand its product line.
 No basis.
C- Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.
 No mention of transportation costs in the statement.
D- Electronics are cheaper to produce outside Country S than inside Country S. 
 Since the taxes directly helped the company to become competitive, the difference in the price must have been an important factor. Most valid argument.
E- The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.
 No basis. 

I usually go by POE - 2,3 and 5 immediately out. Out of 1 and 4, 4 makes the most sense. Hence,  D  it is.

ricokevin · Answer

You couldn't assume normal economics things?? It's true that you must not use information other than what is stated in the passage but...hmm...I just generalized that cheaper produce "usually" leads to cheaper price...maybe this generalization is the inference that the question is asking u to make. As for your first question, no, I don't work backwards. I always read the passage/question first and then look at the answer choices... I guess the OA is D?

mba07 · Answer

D it is!
The other options aren't relevant.
OA?

A small country, Country S, has instituted a hefty tax on

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