mba1382 wrote:
Although the price of gasoline can sometimes reach uncomfortable highs, the true price of gas is not reflected in the price paid at the pump. Oil companies receive billions of dollars in tax credits and subsidies from the government. In addition, taxes pay for the maintenance of roads and highways, which the oil companies rely on to create a market for their product. Therefore, drivers of small, high-mileage vehicles are subsidizing the gas purchases of drivers of gas-inefficient vehicles.
Which of the following would it be most useful to determine in order to evaluate the argument?
(A) Whether other segments of the population, such as pedestrians or bicyclists, derive benefits from road and highway maintenance
(B) Whether, on average, drivers of high-mileage vehicles of drivers of gas-inefficient vehicles spend more per month on gas
(C) Whether oil companies earn a substantial proportion of their profits from automobile gasoline sales
(D) Whether the benefits of road and highway maintenance accrue disproportionately to drivers of gas-inefficient vehicles
(E) Whether tax credits to oil companies and road maintenance are the only way the government affects the price of gas
Please explain your reasoning along with your answer.
Dear
mba1382I'm happy to respond.
Apparently, this is a GMAT Hacks question. I'm not sure that I like it.
First of all, let's eliminate
(A) &
(E) right away --- irrelevant. Perhaps they could be distractors, but when it comes down to it, they say zilch about whether drivers of small, high-mileage vehicles are subsidizing the gas purchases of drivers of gas-inefficient vehicles. Those two are out.
(C) is interesting, but suppose we knew the answer were "yes" ---- suppose we knew, "Yes, 75% of the profits of oil companies comes directly from automobile gasoline sales." Even if we knew that was true, that would not tell us who was getting a better deal, drivers of small, high-mileage vehicles or drivers of gas-inefficient vehicles. Knowing the answer does not necessarily shed any light on the answer to the specific question we trying to evaluate.
(C) is out.
Now,
(B) &
(D).
(D) is clearly a valid answer ---- if the drivers of gas-inefficient vehicles benefit disproportionately from the road and highway maintenance, then all those tax dollars spend on that benefits them more, and the other drivers who pay their taxes are paying for those benefits. That would clearly mean that "
drivers of small, high-mileage vehicles are subsidizing the gas purchases of drivers of gas-inefficient vehicles".
(B) is what I find problematic. The GMAT Hacks folks say, "
This is related to the topic at hand, but not very directly. The amount spent on gas depends not only on gas efficiency, but also on number of miles driven. Since we don't know whether high- or low-mileage vehicle drivers drive more miles, we can't evaluate the argument with this bit of information." Something is a little funky about the grammar of
(B) ---- "
drivers of high-mileage vehicles of drivers of gas-inefficient vehicles" --- when it comes right down to it, I'm not sure what they are trying to say there. Should that "
of" be an "
or"? Or, are they trying to say one subgroup among a larger group?? The unclear wording is identical on the GMAT Hacks website, so there was no copying error in posting this question.
I interpreted
(B) as ----
whether drivers of gas-inefficient vehicles spend more per month on gas than do drivers of small, high-mileage vehicles. Let's think about this. Suppose that's true, as one might suspect it would be. Suppose, on average, drivers of gas-inefficient vehicles spend, say, $150/month on gas, and drivers of small, high-mileage vehicles spend, say, $60/month. Now, suppose what anyone pays at the pump is 10% of the true cost of the oil --- the paragraph tells us the true cost is much more that what folks pay at the pump: I just pick 10% for convenience. This means the drivers of gas-inefficient vehicles pay $150 for $1500 worth of gas, netting a 1500 - 150 = $1350 savings from the government. By contrast, the drivers of small, high-mileage vehicles pay $60 for $600 of gas, netting a $540 savings from the government. Assuming, on average, both sets of drivers pay the same taxes, then one group is clearly getting more a savings, and others, by paying their income taxes, are subsidizing this.
If my interpretation of
(B) is valid, then it's also a valid answer. BTW, I believe this is what happens in real life --- something often reflected in GMAT CR questions in official material! If they have another understanding of what
(B) says, then it is far from clear to me. If what they mean to say is:
(B') Whether, among all drivers of gas-inefficient vehicles, those drivers who drive the highest mileage, on average, spend more per month on gas. OK, then that answer would be would clearly not be relevant to answering the question, leaving
(D) as the only contender. I guess the issue is precisely what they are trying to communicate in
(B).
Here's a practice CR question with no ambiguity in the text of the question.
https://gmat.magoosh.com/questions/3128When you submit your answer, the following page will have a video explanation. Each one of our GMAT practice questions has its own video explanation, for accelerated learning.
Let me know if you have any questions.
Mike