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23 Apr 2020, 01:52
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Credit card companies justify charging cardholders additional fees for late payments by asserting the principle that those who expose other individuals, companies, or institutions to financial risk should pay for that risk, and by pointing out that late-paying cardholders present a greater risk of default than other cardholders. Without late fees, the companies argue, they would have spread the cost of the risk over all cardholders.
The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments?
(A) School authorities should use student activity funds to pay for student-caused damages to school property since, even though only a few students cause any significant damage, authorities cannot in most instances determine which students caused the damage.
(B) Insurance companies should demand higher insurance rates of drivers of sports cars than of other drivers, since sports car drivers are more likely to cause accidents and thus are more likely to requite the companies pay money in claims.
(C) Libraries should charge high fines for overdue books, since if they did not do so some people would keep books out indefinitely, risking inconvenience to other library users who want to use the books.
(D) Cities should impose high fines for littering. The risk of being caught littering is quite low, so the fine for those who are caught must be correspondingly high in order to deter people form littering.
(E) Municipalities should use tax money to pay for the maintenance of municipal roads, since if individuals paid for only those roads they used, some important roads in remote areas would be inadequately maintained.
24 Apr 2020, 00:57
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Credit card companies justify charging cardholders additional fees for late payments by asserting the principle that those who expose other individuals, companies, or institutions to financial risk should pay for that risk, and by pointing out that late-paying cardholders present a greater risk of default than other cardholders. Without late fees, the companies argue, they would have spread the cost of the risk over all cardholders.
STIMULUS: The credit card companies justify charging additional fees for late payments to individuals by justifying that the late paying card holders present a greater risk of default than other candidates without late fees the companies argue that the spread of the cost the risk of default to all card holders. IMO C clearly shows same anology.
The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments?
(A) School authorities should use student activity funds to pay for student-caused damages to school property since, even though only a few students cause any significant damage, authorities cannot in most instances determine which students caused the damage.
(B) Insurance companies should demand higher insurance rates of drivers of sports cars than of other drivers, since sports car drivers are more likely to cause accidents and thus are more likely to requite the companies pay money in claims.
(C) Libraries should charge high fines for overdue books, since if they did not do so some people would keep books out indefinitely, risking inconvenience to other library users who want to use the books.
(D) Cities should impose high fines for littering. The risk of being caught littering is quite low, so the fine for those who are caught must be correspondingly high in order to deter people form littering.
(E) Municipalities should use tax money to pay for the maintenance of municipal roads, since if individuals paid for only those roads they used, some important roads in remote areas would be inadequately maintained.
STIMULUS: The credit card companies justify charging additional fees for late payments to individuals by justifying that the late paying card holders present a greater risk of default than other candidates without late fees the companies argue that the spread of the cost the risk of default to all card holders. IMO C clearly shows same anology.
The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments?
(A) School authorities should use student activity funds to pay for student-caused damages to school property since, even though only a few students cause any significant damage, authorities cannot in most instances determine which students caused the damage.
(B) Insurance companies should demand higher insurance rates of drivers of sports cars than of other drivers, since sports car drivers are more likely to cause accidents and thus are more likely to requite the companies pay money in claims.
(C) Libraries should charge high fines for overdue books, since if they did not do so some people would keep books out indefinitely, risking inconvenience to other library users who want to use the books.
(D) Cities should impose high fines for littering. The risk of being caught littering is quite low, so the fine for those who are caught must be correspondingly high in order to deter people form littering.
(E) Municipalities should use tax money to pay for the maintenance of municipal roads, since if individuals paid for only those roads they used, some important roads in remote areas would be inadequately maintained.
01 Mar 2021, 02:20
Kudos
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Credit card companies justify charging cardholders additional fees for late payments by asserting the principle that those who expose other individuals, companies, or institutions to financial risk should pay for that risk, and by pointing out that late-paying cardholders present a greater risk of default than other cardholders. Without late fees, the companies argue, they would have spread the cost of the risk over all cardholders.
The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments?
The basic argument is that those who do something wrong must pay the penalty, else the risk of wrongdoing will also be distributed to those who have done nothing wrong.
(A) School authorities should use student activity funds to pay for student-caused damages to school property since, even though only a few students cause any significant damage, authorities cannot in most instances determine which students caused the damage.
-In this option, the damages are being distributed equally among students. INCORRECT.
(B) Insurance companies should demand higher insurance rates of drivers of sports cars than of other drivers, since sports car drivers are more likely to cause accidents and thus are more likely to requite the companies pay money in claims.
- CORRECT. Since companies would pay for damages more often for sports cars, it makes sense to charge sports cars with higher premium. Otherwise, even those who drive safely will have to bear some of the cost of sports car.
(C) Libraries should charge high fines for overdue books, since if they did not do so some people would keep books out indefinitely, risking inconvenience to other library users who want to use the books.
-Looks close, but there are no financial risks for other students, in case some students do not return the books on time. INCORRECT.
(D) Cities should impose high fines for littering. The risk of being caught littering is quite low, so the fine for those who are caught must be correspondingly high in order to deter people form littering.
-Risk of getting caught is not discussed (somewhat out of scope). INCORRECT.
(E) Municipalities should use tax money to pay for the maintenance of municipal roads, since if individuals paid for only those roads they used, some important roads in remote areas would be inadequately maintained.
-In this option, the the tax amount is being distributed equally among students. INCORRECT.
The principle invoked by the credit card companies would, if established, be most usefully invoked in which one of the following arguments?
The basic argument is that those who do something wrong must pay the penalty, else the risk of wrongdoing will also be distributed to those who have done nothing wrong.
(A) School authorities should use student activity funds to pay for student-caused damages to school property since, even though only a few students cause any significant damage, authorities cannot in most instances determine which students caused the damage.
-In this option, the damages are being distributed equally among students. INCORRECT.
(B) Insurance companies should demand higher insurance rates of drivers of sports cars than of other drivers, since sports car drivers are more likely to cause accidents and thus are more likely to requite the companies pay money in claims.
- CORRECT. Since companies would pay for damages more often for sports cars, it makes sense to charge sports cars with higher premium. Otherwise, even those who drive safely will have to bear some of the cost of sports car.
(C) Libraries should charge high fines for overdue books, since if they did not do so some people would keep books out indefinitely, risking inconvenience to other library users who want to use the books.
-Looks close, but there are no financial risks for other students, in case some students do not return the books on time. INCORRECT.
(D) Cities should impose high fines for littering. The risk of being caught littering is quite low, so the fine for those who are caught must be correspondingly high in order to deter people form littering.
-Risk of getting caught is not discussed (somewhat out of scope). INCORRECT.
(E) Municipalities should use tax money to pay for the maintenance of municipal roads, since if individuals paid for only those roads they used, some important roads in remote areas would be inadequately maintained.
-In this option, the the tax amount is being distributed equally among students. INCORRECT.
