During an economic depression, it is common for food prices to increas

Question

During an economic depression, it is common for food prices to increase even as incomes decrease. Surprisingly, however, researchers determined that during a depression, for every 5 percent increase in the cost of bread, the lowest socioeconomic class actually increases the amount of bread purchased per capita by 3 percent.

Which of the following hypotheses best accounts for the researchers’ findings?

(A) Not all food costs increase during a depression; some food items actually become less expensive.

(B) Because bread consumption does not increase by the same percentage as the cost does, people are likely consuming more of other food items to compensate.

(C) When incomes decrease, people are typically forced to spend a larger proportion of their income on basic needs, such as food and housing.

(D) People who suddenly cannot afford more expensive foods, such as meat, must compensate by consuming more inexpensive foods, such as grains.

(E) During a depression, people in the lowest socioeconomic class will continue to spend the same amount of money on food as they did before the depression began.

PyjamaScientist · Accepted Answer

Critique while you read the passage. 
 
The argument presents a situation where an increase in prices and decrease in salaries has led to a  paradox , i.e., the lowest socioeconomic class  has increased  its  spending   on bread.  Why would that happen?  As it's  logical   reasoning, you can quickly come up with a  counter reason -  Maybe they can't afford to eat  costlier / expensive   stuff anymore due to  inflation  .

Option  (D)  does just that. It presents a  reason   why the lowest socioeconomic class has increased its bread spending -  to compensate for the loss of ability to buy meat or other expensive foods .

shaliny · Answer

hello Bunuel, Karishma B and other Experts,
 please help me to understand the clear reasoning behind this argument and why option C is wrong and option D is correct which is talking about expensive and inexpensive items??

guddo · Answer

During an economic depression, it is common for food prices to increase even as incomes decrease. Surprisingly, however, researchers determined that during a depression, for every 5 percent increase in the cost of bread, the lowest socioeconomic class actually increases the amount of bread purchased per capita by 3 percent.

Which of the following hypotheses best accounts for the researchers’ findings?

The finding is surprising only if we assume that when bread gets more expensive, poor households should buy less of it. So the best hypothesis must explain why they would buy  more  bread even when its price rises.

(A) Not all food costs increase during a depression; some food items actually become less expensive.

This does not explain why bread purchases specifically would rise. If other foods become cheaper, people might shift away from bread.

(B) Because bread consumption does not increase by the same percentage as the cost does, people are likely consuming more of other food items to compensate.

This does not explain the finding. It just guesses that people may also eat other foods.

(C) When incomes decrease, people are typically forced to spend a larger proportion of their income on basic needs, such as food and housing.

This explains why food matters more, but it does not explain why bread consumption itself rises.

(D) People who suddenly cannot afford more expensive foods, such as meat, must compensate by consuming more inexpensive foods, such as grains.

This is the best answer. Even if bread becomes more expensive, it may still be cheaper than foods like meat. So poorer households may buy more bread as a substitute for costlier foods.

(E) During a depression, people in the lowest socioeconomic class will continue to spend the same amount of money on food as they did before the depression began.

This does not explain why they would buy more bread. In fact, if bread costs more and food spending stays the same, that would tend to limit purchases.

Answer: (D)

AbhishekP220108 · Answer

Hi  shaliny  let me try to help

During an economic depression, it is common for food prices to increase even as incomes decrease. Surprisingly, however, researchers determined that during a depression, for every 5 percent increase in the cost of bread, the lowest socioeconomic class actually increases the amount of bread purchased per capita by 3 percent.

Looking at the argument we can see that there is some kind of paradox. We have given information about an economic depression where the prices of foods increase even when income is decreasing. But whenever there is 5% increment in price lowest socioeconomic class actually increases the amount of bread purchased per capita by 3 percent. So basically as per argument since the income is decreasing these doesn't have to increase their expenses right.

Which of the following hypotheses best accounts for the researchers’ findings?

So we have to find the hypothesis for this observed finding

(A) Not all food costs increase during a depression; some food items actually become less expensive.- This cant do anything to tell us about the finding eliminate

(B) Because bread consumption does not increase by the same percentage as the cost does, people are likely consuming more of other food items to compensate.-other food items fine but why there is increment of 3% per capita not helping eliminate

(C) When incomes decrease, people are typically forced to spend a larger proportion of their income on basic needs, such as food and housing.-it talks about the superset but doesn't tell anything about why there is increase in bread

(D) People who suddenly cannot afford more expensive foods, such as meat, must compensate by consuming more inexpensive foods, such as grains.- well yes if they can't afford meat then must compensate through grains and breads are made from grains so keep it

(E) During a depression, people in the lowest socioeconomic class will continue to spend the same amount of money on food as they did before the depression began.-this is talking about behavior nothing about increase in spending so eliminate

Option D remains and it is the correct one

Hope this helps

egmat · Answer

Hi shaliny,

Great question! Let me walk you through exactly why C falls short and D nails it.

First, let's be clear about what we need to explain:  bread prices go UP, yet the poorest people buy MORE bread. That's weird, right? Normally, higher prices mean people buy less. So we need a reason that explains this specific paradox.

Now let's test Choice C:  It says people spend a larger proportion of their income on basic needs like food and housing. Okay, but this is too vague. It tells us people spend more on food IN GENERAL, but it doesn't explain why they buy MORE BREAD specifically when bread is getting MORE EXPENSIVE. If anything, spending more on food could mean buying any type of food. C doesn't address the paradox at all — it just restates that food takes up more of the budget.

Now let's test Choice D:  It says people who can no longer afford expensive foods like meat MUST compensate by eating more cheap foods like grains (bread). THIS is the missing puzzle piece. Even though bread costs more, it's still far cheaper than meat. So when incomes drop, people are forced to give up meat and replace those calories with bread. That  substitution effect  is so powerful that it actually increases bread consumption despite the price going up.

Think of it this way:  Imagine you used to eat steak  3  nights a week and bread  4  nights. Now you can't afford steak at all, so you eat bread  7  nights. Bread got more expensive, but you're still buying MORE of it because it replaced meat.

C describes a general pattern about spending. D provides the specific MECHANISM ( substitution from expensive to cheap food ) that explains the paradox.

Key takeaway:  When an explanation question asks you to account for a surprising finding, the correct answer must directly address the specific surprise, not just describe a general trend that's loosely related.

Common mistake:  Picking an answer like C that is loosely related to the topic but fails to address the specific paradox presented in the stimulus.

Answer: D

shaliny · Answer

egmat

Another doubt is that question stem mentioned word 'Hypotheses' which is also used for assumption question. So how would i differentiate between paradox and assumption question with this terminology??

AbhishekP220108 · Answer

Hi  shaliny

Assumption always falls under must be true whereas this question is basically under resolve the paradox.

Below are some assumptions question stem.

"Which of the following is an assumption required by the argument?"
"The argument relies on which of the following assumptions?"
"Which of the following, if true, enables the conclusion to be properly drawn?"
"The argument assumes which one of the following?"
"The argument depends on which of the following?"

Hope this helps!

yashsharma1 · Answer

I have a basic question. Option D says that people switch to cheaper food like grains. The option does not include bread which is in Q.stem and the stem does not say that bread is a type of inexpensive food. Are we assuming the bread to be in inexpensive category because it is bought by people from lowest socioeconomic class? This conflict was the only reason I chose C even though it did not capture the specifics and was a broad choice.
 KarishmaB   GMATNinja  If you can please help me understand this or am I reading too much into the Q.language

guddo · Answer

Yes, I think you are reading a little too much into the wording.

We are not assuming bread is inexpensive because poor people buy it. Rather, bread is a basic grain-based staple, and D uses “grains” as the broader category that includes foods such as bread.

The key idea is this: when people cannot afford expensive foods such as meat, they may buy more staple foods instead. So  D explains why bread purchases can increase even when bread becomes more expensive .

C is too broad because it only says people spend more of their income on basic needs. It does not explain the specific shift toward  more bread .

KarishmaB · Answer

There are different food groups - grains, meats, dairy etc. 
Bread is how grain is consumed. Bread is made from grains - wheat bread, millets bread, flatbreads (paranthas, nan etc.) ... They are typically made from grains. 
Option (D) says that meats are expensive and with lower salaries, people cannot afford it. So they consume the cheaper food group more - grains. That is, they will eat more bread and less of the expensive foods.

During an economic depression, it is common for food prices to increas

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During an economic depression, it is common for food prices to increas

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