Country Y uses its scarce foreign-exchange reserves to buy scrap iron

Country Y uses its scarce foreign-exchange reserves to buy scrap iron for recycling into steel. Although the
steel thus produced earns more foreign exchange than it costs, that policy is foolish. Country Y’s own
territory has vast deposits of iron ore, which can be mined with minimal expenditure of foreign exchange.
Which of the following, if true, provides the strongest support for Country Y’s policy of buying scrap iron
abroad?

(A) The price of scrap iron on international markets rose significantly in 1987.
(B) Country Y’s foreign-exchange reserves dropped significantly in 1987.
(C) There is virtually no difference in quality between steel produced from scrap iron and that produced from
iron ore.
(D) Scrap iron is now used in the production of roughly half the steel used in the world today, and experts
predict that scrap iron will be used even more extensively in the future.
(E) Furnaces that process scrap iron can be built and operated in Country Y with substantially less foreign
exchange than can furnaces that process iron ore

Hello,
D: Scrap iron is now used in the production of roughly half the steel used in the world today, and experts
predict that scrap iron will be used even more extensively in the future.

For me "D" seems to be not correct as Country "Y" cannot buy large amounts of scrap iron with the few foriegn reserves that they have. So it does not matter whether steel will have substantially made from scrap iron.

The Option "E" still puzzles me..
"Furnaces that process scrap iron can be built and operated in Country Y with substantially less foreign
exchange than can furnaces that process iron ore"

First, Country "Y" has to be buy scrap iron with the foreign costs. Though the cost of processing the scrap is much less than processing iron ore,
it is not mentioned about the cost of buying the scrap where as iron ore is readily avaiable without foreign costs .. So still not clear.

Hi Reachnaidu,
From the premise we see that there are two mediums by which country Y can produce steel. First is by buying scrap iron from other countries and then converting it to steel. The second way is to mine own iron ores and then converting them to steel. Although the profit is coming by both the methods,
costs associated with mining < costs associated with buying.
But now our aim is to support the latter. So for this we have to pick a factor that would anyhow support the step that buying scrap iron is beneficial.
Option E properly supports that by saying that
Operating costs associated with scrap iron < operating costs associated with iron ore
As far as your explanation is concerned, that is “it is not mentioned about the cost of buying the scrap where as iron ore is readily available without foreign costs”
When you said iron ore is readily available, you are thinking that it’s freely available anywhere. But in the passage it’s given that iron ore has to be mined and you have consider the costs associated with mining too.
See the sentence in the premise – “Country Y’s own territory has vast deposits of iron ore, which can be mined with minimal expenditure of foreign exchange”.
I hope this clears your confusion.

this seems like a strengthen question. could the mods update the topic?

Question Que: " what is the Strongest support for Y's policy"
Author said policy Y is foolish, Our stand is to oppose author's conclusion by supporting Y's policy
Question Type: weaken, argument, plan

To weaken this type of question *we can use outside information that support the stand*
1. find conclusion 2.find evidence (premise) 3.find assumption (gap) 4. ATTACK the gap (alternate cause)

Conclusion: Author said policy Y is foolish
What we are looking for: Policy Y is not foolish

Evidence: Country Y have a policy to use FE to buy scrap iron and turn into steel.
Although steel earns more, Y can reduce FE expenditure by mining its deposits of iron ore.

Assumption (pre-thinking that closes the gap)
1. What if the mining of iron ore has some relevancy to FE, such as underlyings procesess that requires FE eg. tools, manufacturing etc.

Weaken
It will defeat the purpose of mining ore if underlyings FE of iron ore outweigh those of buying FE scrap iron.

Question Que: "seriously weaken"
Question Type: weaken, argument

To weaken this type of question:
1. find conclusion 2.find evidence (premise) 3.find assumption (gap) 4. ATTACK the gap (alternate cause)

Conclusion: Farmers cut tree, then more water flow

Evidence: water supply is strictly control: farms along the river have limited access to water for irrigation use.

Assumption (pre-thinking that closes the gap):
Trees are not beneficial in water irrigation. Therefore, if Cut tree, irrigation will improve.

Weaken:
Trees are beneficial in water irrigation. Therefore, if Cut tree, irrigation will get worst

Answer Choice C:
A. Cut tree , water lost through evaporation.

Hi Experts
Can you please tell in detail if option A and B, Have any impact on the conclusion? In my opinion, both have no impact on the conclusion , as my thought process- "So what if something happened in 1987??? We donot know what is the timeline today and if that effect of 1987 continued today or vanished??"
Please let me know if this understanding is correct.
Thanks in advance.
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Your reasoning makes sense.

Furthermore, the passage states as fact that the steel thus produced earns more foreign exchange than it costs. So, even if (A) or (B) were still affecting conditions today, that affect and the choice would make no difference. Regardless of what (A) says, Country Y is spending less than it is making, and regardless of what (B) says, Country Y is able to carry on this operation and is increasing its foreign exchange reserves by doing so.
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MartyTargetTestPrep Thanks a lot! Makes sense.
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Option E says (E) Furnaces that process scrap iron can be built and operated in Country Y with
substantially less foreign exchange than can furnaces that process iron ore.

Does the below statement mean that the mining of iron ore is less expensive than buying scrap iron ? - Please comment
"Country Y's own territory has vast deposits of iron ore, which can be mined
with minimal expenditure of foreign exchange"
If so then E is not correct because the option E only factors in the costs of processing of iron ore vs scrap iron . It does not compare the cost of buying the scrap metal with the cost of mining the iron ore . According to the passage , iron ore mining is a better option than buying scrap iron because mining iron ore requires minimal expenditure of the foreign exchange . This implies that the cost of mining iron ore should be less than buying scrap iron otherwise how is mining iron ore is a better alternative than buying scrap iron .
Now that we have this established we can assume : (1) Cost of scrap iron > Cost of mining iron ore
and (2) Cost of processing Scrap iron < Cost of processing iron ore
So we can not be sure whether the combined costs on the left hand side of the above equations will be greater than or less than or equal to the combined costs on the right side of the above equations.
Only reasoning I can think of is the word "substantially" which means the equation 2 stands as : Cost of processing Scrap iron << Cost of processing iron ore . As it is substantially less therefore even if equation 1 holds true , the overall costs of buying and processing scrap iron will be less than the over all costs of mining the iron ore and processing it .
In that case E is correct
PLEASE CLARIFY ????

Hi Experts,
VeritasKarishma GMATNinjaTwo GMATNinja

I agree that E strengthens better than D, but I am not able to find a convincing reason to reject D

Question stem: Support policy of buying scrap iron abroad. Firstly, this question never asked us to support that buying scrap iron abroad is better than iron ore. I agree that one way to prove buying scrap iron is good is by comparison with iron ore. But overall we need to support that buying scrap iron from abroad is good. 

Now if we try to understand D
(D) Scrap iron is now used in the production of roughly half the steel used in the world today, and experts predict that scrap iron will be used even more extensively in the future.
Scrap iron is used worldwide right now and will be used more even in the future indicates that scarp iron is good. So it increases my belief in the policy of buying scrap iron. For D, I don't see a negative impact or no impact on the given question stem. Can you please help how to arrive at no impact?

The problem with (D) is that we don’t know why scrap iron is used worldwide and will be used more extensively in the future. It’s possible, as you suggest, that this is because it’s more beneficial to use scrap iron. But it’s also possible that other factors are driving the increased usage of scrap iron.

Perhaps iron ore is only widely available in Country Y and other countries are using scrap iron out of necessity. Iron ore could still be the better option, but other countries may be forced to use scrap iron. For that reason, (D) does not necessary support the policy of buying scrap iron abroad, and we can eliminate it.

I hope that helps!
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Country Y thought of initial cost to setup since it was scarce

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