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# Canadian wheat farmers produced so much wheat over the last

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Senior Manager
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06 Mar 2010, 00:02
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Question Stats:

64% (02:11) correct 36% (00:44) wrong based on 17 sessions

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Canadian wheat farmers produced so much wheat over the last season that wheat prices plummeted. The government tried to boost wheat prices by offering farmers who agreed not to harvest 20 percent of their wheat field compensation up to a specified maximum per farm. The Canadian government's program,... if successful, will not be a net burden on the budget.
Which of the following, if true, is the best basis for an explanation of how this could be so?
(A) If prices were allowed to remain low, the farms would be operating at a loss, causing the government to lose tax revenue on farm profits.
(B) Wheat production in several countries declined the year that the compensation program went into effect in Canada.
(C) The first year that the compensation program was in effect, wheat acreage in Canada ... See Morewas 5% below its level in the base year for the program.
(D) The specified maximum per farm meant that for very large wheat farms the compensation was less per acre for those acres than they were for smaller farms.
(E) Farmers who wished to qualify for compensation program could not use the land not harvested for wheat to grow another crop.
OA
[Reveal] Spoiler:
A

Need explanation.
Source--> Andrea from FB group
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06 Mar 2010, 10:55
See its clear A as government who'll give that facility to the farmer will not loose tax revenue and if not given then the loss will occur.
By the way
Quote:
Source--> Andrea from FB group
I didn't get this
Senior Manager
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06 Mar 2010, 11:45
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The reason it's A is that if the prices remain low then the government will miss out on the tax revenue from the farms because the farms won't make any profit at all. But if the government pays this price then it will make money as long as the farms make money. A is the best answer. However, A doesn't fully prove that the money the gov't will get is more than it will outlay which is needed for the last sentence in the stem to be true. A just gives the possibility for it to be true.
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06 Mar 2010, 18:01
Thanks for explaining guys.
@angel2009 it means Question was posted by user Andrea on FB (Facebook) group (The daily gmat)
_________________

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Kudos??

Senior Manager
Status: Yeah well whatever.
Joined: 18 Sep 2009
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GMAT 1: 660 Q42 V39
GMAT 2: 730 Q48 V42
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WE: Analyst (Insurance)
Followers: 5

Kudos [?]: 73 [0], given: 17

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06 Mar 2010, 19:00
I guess I'll be joining that group then.
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11 Mar 2010, 14:27
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Hey All,

So Vann's explanation here was fantastic, but I thought I'd throw in my two cents. We don't get a lot of "Explain the Discrepancy" questions here on the forums, so I have to take one when I can get it. I just wanted to remind you all that there is still a process, which I'd like to model for you.

Instead of a typical CR outline (conclusions/premises/assumptions), discrepancy questions revolve around one question. Just make sure you REWORD/PARAPHRASE that question, and actually write it down. If you have confidence in it, you'll see how all the wrong answer choices fail to resolve your issue.

In this case, the discrepancy is fairly straightforward: How can the government pay a bunch of money to farms and yet not lose money?

It should be obvious that the correct answer better describe how the government is MAKING money in some other way:

(A) If prices were allowed to remain low, the farms would be operating at a loss, causing the government to lose tax revenue on farm profits.
ANSWER: This answer choice is a bit tricky, because instead of describing DIRECTLY how the government might gain money, it explains how the payments to farms will keep it from losing EVEN MORE money.

(B) Wheat production in several countries declined the year that the compensation program went into effect in Canada.
PROBLEM: See, without a rephrase of the question, this is the kind of weird indirect answer choice that you'd end up staring at for 30 seconds. But it doesn't remotely relate to the government making money, so we can cross it off.

(C) The first year that the compensation program was in effect, wheat acreage in Canada was 5% below its level in the base year for the program.
PROBLEM: Again, a bit of statistics to make you think you're missing something. But the amount of acreage is irrelevant, because we need to get more money to the government somehow.

(D) The specified maximum per farm meant that for very large wheat farms the compensation was less per acre for those acres than they were for smaller farms.
PROBLEM: This sucks for the farms, but still doesn't tell us anything about our discrepancy.

(E) Farmers who wished to qualify for compensation program could not use the land not harvested for wheat to grow another crop.
PROBLEM: Again, sucks to be a farmer.

The process is great because it helps you center your attention. This question is about THE GOVERNMENT, and answer choice A is the only one that even mentions the government by name!

Hope that helps!

-t
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Tommy Wallach | Manhattan GMAT Instructor | San Francisco

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12 Mar 2010, 01:04
TommyWallach wrote:
Hey All,

So Vann's explanation here was fantastic, but I thought I'd throw in my two cents. We don't get a lot of "Explain the Discrepancy" questions here on the forums, so I have to take one when I can get it. I just wanted to remind you all that there is still a process, which I'd like to model for you.

Instead of a typical CR outline (conclusions/premises/assumptions), discrepancy questions revolve around one question. Just make sure you REWORD/PARAPHRASE that question, and actually write it down. If you have confidence in it, you'll see how all the wrong answer choices fail to resolve your issue.

In this case, the discrepancy is fairly straightforward: How can the government pay a bunch of money to farms and yet not lose money?

It should be obvious that the correct answer better describe how the government is MAKING money in some other way:

(A) If prices were allowed to remain low, the farms would be operating at a loss, causing the government to lose tax revenue on farm profits.
ANSWER: This answer choice is a bit tricky, because instead of describing DIRECTLY how the government might gain money, it explains how the payments to farms will keep it from losing EVEN MORE money.

(B) Wheat production in several countries declined the year that the compensation program went into effect in Canada.
PROBLEM: See, without a rephrase of the question, this is the kind of weird indirect answer choice that you'd end up staring at for 30 seconds. But it doesn't remotely relate to the government making money, so we can cross it off.

(C) The first year that the compensation program was in effect, wheat acreage in Canada was 5% below its level in the base year for the program.
PROBLEM: Again, a bit of statistics to make you think you're missing something. But the amount of acreage is irrelevant, because we need to get more money to the government somehow.

(D) The specified maximum per farm meant that for very large wheat farms the compensation was less per acre for those acres than they were for smaller farms.
PROBLEM: This sucks for the farms, but still doesn't tell us anything about our discrepancy.

(E) Farmers who wished to qualify for compensation program could not use the land not harvested for wheat to grow another crop.
PROBLEM: Again, sucks to be a farmer.

The process is great because it helps you center your attention. This question is about THE GOVERNMENT, and answer choice A is the only one that even mentions the government by name!

Hope that helps!

-t

I just love your guidelines and the way you broke it down. Deeply appreciated!
You presented what I was expecting from the forum (That's why, I posted it here so that I can get more insight and learn).
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12 Mar 2010, 20:51
Glad to help! (Thanks for the kudos!)

-t
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13 Mar 2010, 13:02
1
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+1 for a
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28 Mar 2010, 23:16
thanku A it is
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06 Apr 2010, 07:07
Good one ..
went for B, even though it looked a bit out of scope. A looked like rehashing the problem, but Tommy's explanation clears it up...Kudos Tommy
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