GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 18 Apr 2019, 10:00

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

All other things being equal, car insurance for the repair of collisio

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

 
General GMAT Forum Moderator
avatar
V
Joined: 29 Jan 2015
Posts: 1208
Location: India
WE: General Management (Non-Profit and Government)
GMAT ToolKit User Premium Member Reviews Badge CAT Tests
All other things being equal, car insurance for the repair of collisio  [#permalink]

Show Tags

New post 11 Jul 2017, 06:09
4
00:00
A
B
C
D
E

Difficulty:

  55% (hard)

Question Stats:

64% (01:51) correct 36% (02:04) wrong based on 134 sessions

HideShow timer Statistics

All other things being equal, car insurance for the repair of collision damage costs more in Richmond than in Layton. Interestingly, drivers in Richmond are statistically less likely to be involved in an accident while driving than are drivers in Layton. Clearly, insurance companies have a larger profit margin on policies covering cars in Richmond when compared with those covering cars in Layton.

Which of the following, if true, most strengthens the above argument?

A. The average cost of repairing collision damage costs about the same in Richmond as it does in Layton.
B. Layton and Richmond have roughly equivalent populations.
C. Drivers in Richmond who have been involved in an accident are less likely to notify the police than are drivers in Layton.
D. Collision damage insurance costs more in Layton than every other neighboring municipality, excepting Richmond.
E. Consumer watch groups have long suspected that insurance companies are charging inflated premiums for coverage of vehicles in Richmond.

_________________
If you liked my post, kindly give me a Kudos. Thanks.
VP
VP
avatar
V
Joined: 30 Jan 2016
Posts: 1010
Reviews Badge
All other things being equal, car insurance for the repair of collisio  [#permalink]

Show Tags

New post 11 Jul 2017, 09:26
rohan2345 wrote:
All other things being equal, car insurance for the repair of collision damage costs more in Richmond than in Layton. Interestingly, drivers in Richmond are statistically less likely to be involved in an accident while driving than are drivers in Layton. Clearly, insurance companies have a larger profit margin on policies covering cars in Richmond when compared with those covering cars in Layton.

Which of the following, if true, most strengthens the above argument?

A. The average cost of repairing collision damage costs about the same in Richmond as it does in Layton.
B. Layton and Richmond have roughly equivalent populations.
C. Drivers in Richmond who have been involved in an accident are less likely to notify the police than are drivers in Layton.
D. Collision damage insurance costs more in Layton than every other neighboring municipality, excepting Richmond.
E. Consumer watch groups have long suspected that insurance companies are charging inflated premiums for coverage of vehicles in Richmond.


We have to focus on the conclusion, that's what we are trying to strengthen - insurance companies have a larger profit margin in Richmond.

(A) From premise 1: car insurance in Richmond is higher, say $1,500 in Ricmond and $1,000 in Layton. If the average cost of repairing is the same in both cities, say $800, then: profit margin in Richmond is $1,500 - $800 = $700
profit margin in Richmond is $1,000 - $800 = $200
Hence, (A) strengthens the conclusion : have a larger profit margin in Richmond

(B) irrelevant, the argument is not about population size

(C) irrelevant, we are talking about profit margin

(D) Irrelevant. This answer choice says that insurance costs in Richmond> insurance costs in Layton > insurance costs in every other neighboring municipality.

(E) This one is interesting. However, the conclusion includes a conclusion indicator "Clearly". What watch groups suspect is irrelevant, and this choice does not strenghten the conclusion.
_________________
Non progredi est regredi
GMAT Tutor
avatar
S
Joined: 24 Jun 2008
Posts: 1418
Re: All other things being equal, car insurance for the repair of collisio  [#permalink]

Show Tags

New post 11 Jul 2017, 09:37
We know:

- insurance costs more in R
- there are fewer accidents in R

and the conclusion is that insurers are making bigger profits in R. But there's one thing we don't know about - the cost of the accidents in R. Maybe everyone in R drives really rare or expensive cars that cost a lot to repair. Then the insurers might not be making a lot of profit in R, despite the higher insurance rates and lower accident rate, because the insurers might have very high expenses there. That's why the information in A is so helpful here.

None of the other answers are relevant - we don't care about population size, notifying the police, what happens in communities besides Richmond and Layton, or whether consumer groups have noticed that the insurance premiums are high.
_________________
GMAT Tutor in Toronto

If you are looking for online GMAT math tutoring, or if you are interested in buying my advanced Quant books and problem sets, please contact me at ianstewartgmat at gmail.com
Intern
Intern
avatar
S
Joined: 13 Feb 2015
Posts: 11
GMAT 1: 670 Q51 V30
GPA: 3
Reviews Badge
Re: All other things being equal, car insurance for the repair of collisio  [#permalink]

Show Tags

New post 11 Jul 2017, 10:07
1
I feel that this is straight forward answer, If average cost of repairing is more in R than in L. Insurance companies will not be making huge profit.

(A) From premise 1: car insurance in Richmond is higher, say $1,500 in Ricmond and $1,000 in Layton. If the average cost of repairing is the same in both cities, say $800, then: profit margin in Richmond is $1,500 - $800 = $700
profit margin in Richmond is $1,000 - $800 = $200
Hence, (A) strengthens the conclusion : have a larger profit margin in Richmond
GMAT Club Bot
Re: All other things being equal, car insurance for the repair of collisio   [#permalink] 11 Jul 2017, 10:07
Display posts from previous: Sort by

All other things being equal, car insurance for the repair of collisio

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.