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Economist: Government intervention in the free market

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Joined: 22 Jun 2017
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Economist: Government intervention in the free market  [#permalink]

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New post 09 Feb 2019, 19:57
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81% (01:42) correct 19% (02:07) wrong based on 129 sessions

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Economist: Government intervention in the free market in pursuit of socially desirable goals can affect supply and demand, thereby distorting prices. The ethics of such intervention is comparable to that of administering medicines. Most medicines have harmful as well as beneficial effects, so the use of a type of medicine is ethically justified only when its nonuse would be significantly more harmful than its use. Similarly, government intervention in the free market is justified only when it _______.

Which one of the following most logically completes the final sentence above?


(A) would likely be approved of by the majority of the affected participants

(B) has been shown to have few if any significantly harmful effects

(C) is believed unlikely to significantly exacerbate any existing problems

(D) would do less damage than would result from the government’s not intervening

(E) provides a solution to some otherwise insoluble problem

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Re: Economist: Government intervention in the free market  [#permalink]

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New post 06 Mar 2019, 06:13
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Economist: Government intervention in the free market in pursuit of socially desirable goals can affect supply and demand, thereby distorting prices. The ethics of such intervention is comparable to that of administering medicines. Most medicines have harmful as well as beneficial effects, so the use of a type of medicine is ethically justified only when its nonuse would be significantly more harmful than its use. Similarly, government intervention in the free market is justified only when it _______.

Which one of the following most logically completes the final sentence above?


(A) would likely be approved of by the majority of the affected participants

(B) has been shown to have few if any significantly harmful effects

(C) is believed unlikely to significantly exacerbate any existing problems

(D) would do less damage than would result from the government’s not intervening

(E) provides a solution to some otherwise insoluble problem


The right answer is D. This question is essentially asking you about the structure of the argument presented, more specifically to replicate the structure already given to you. The good news with such a question is that you need not worry yourself with the validity of the argument, only with following the same pattern and applying it.

In this case, the medical example given says that the use of medicine should only happen when not using it would be worse. Hence, we're looking for an option that says that government intervention should only happen when it would be worse if it didn't happen.

Option A - Public approval and comparatively less harm are far from the same thing. We can therefore eliminate this option.

Option B - This is a bit of a trap. CR on the GMAT often tries to subtly confuse you between whether something good vs better than something, or in this case, bad or worse than something. Even if we say there are few negative effects, there is no comparison to say that there wouldn't be even fewer negative effects from the govt not intervening.

Option C - Once again, it's not about whether this will create problems on its own terms. The argument we've been given is a direct comparative one, whether the option is better than the alternative. Hence, we don't actually need to care about whether it is objectively good or bad. Remember, murder is bad, but it is better than genocide.

Option D - This actually follows the same argumentative structure, and for structure based CR questions, this is all we need to look for. It is therefore the CORRECT answer!

Option E - It is not necessary for a solution to be provided. All we're looking for is whether it's better than the alternative.

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Re: Economist: Government intervention in the free market   [#permalink] 06 Mar 2019, 06:13
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