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

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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 19 Jan 2015, 15:21
Although I got my answer correct, but I pre-assumed something different than given in the answer choice. Please check whether this my pre-assumption is also correct:

1. Time to bring scrap iron from abroad is less than that used to mine iron ore
2. Country Y has trade negotiations with the country from whom scrap iron is being purchased.


Thanks and Regards
Tushar
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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 19 Jan 2015, 18:45
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. :(
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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 20 Jan 2015, 04:13
1
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. :)
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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 02 Jun 2016, 17:15
this seems like a strengthen question. could the mods update the topic?
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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 25 Jul 2018, 02:29
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.
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Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron  [#permalink]

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New post 25 Jul 2018, 03:09
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.
Re: Country Y uses its scarce foreign-exchange reserves to buy scrap iron &nbs [#permalink] 25 Jul 2018, 03:09

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