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Economist: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. But this practice may hurt more farmers in developing nations than it helps. By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
To evaluate the strength of the economist's argument, it would be the most helpful to know which of the following?
(A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee
(C) Whether many coffee farmers in developing nations also derive income from other kinds of farming
(D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers
(E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers
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31 Jul 2017, 10:04
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tushartiwari4u wrote:
Can someone please explain why A is wrong ? As per A, if hoarding is a way, then there would not be much impact on the prices of non fair trade coffee and hence the profits of such coffee farmers could remain stable. As per B, if only 2 out of 100 farmers grow fair trade coffee, and these 2 farmers maintain the large supply of fair trade coffee. I dont find a co-relation between this fact and the impact on profits of non-fair trade coffee farmers.
Many many thanks!
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OK. The argument that the economist is making here is that the practice of paying more for fair-trade coffee *could* hurt more farmers in developing nations than it helps. We want to determine if this is a good argument -- is what the economist is saying true? Could this practice hurt more farmers than it helps? What do we need to know in order to figure out if that's the case?
Well, we need to figure out how many people are actually making fair-trade coffee -- if only 10% of farmers are making fair-trade coffee, then the inevitable price rise that the economist has detailed will, in fact, hurt more farmers (90%) than it helps (10%). But if 85% of farmers are making fair-trade coffee, the practice helps more farmers (85%) than it hurts (15%). Don't get me wrong, it still hurts the 15% of farmers who aren't making fair-trade coffee, but they're a minority.
(A) isn't really relevant to the argument, which is that "the practice of paying more for fair-trade coffee could hurt more farmers in developing nations than it helps." (A) is a great question to ask if you already know the argument is strong, but we don't -- we're trying to evaluate the strength of the argument.
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Economist: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. But this practice may hurt more farmers in developing nations than it helpes. By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
To evaluate the strength of the economist's argument, it would be the most helpful to know which of the following?
(A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits (B) What proportion of coffee farmers in developing nations produce fair-trade coffee (C) Whether many coffee farmers in developing nations also derive income from other kinds of farming (D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers (E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers
Note : Official answer will be provided once GMAT Official Guide 2018 Verbal Review released.
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee If the non-fair-trade coffee farmers are 0.0001% of the other part (fair-trade coffee farmers)
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31 May 2017, 06:36
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Economist: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. But this practice may hurt more farmers in developing nations than it helpes. By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
Type- evaluate Boil it down – Fair trade benefits farmers as they receive higher prices, but it does hurt non-fair trade farmers . Pre-thinking – Proportion of farmers in developing countries who produce fair- trade coffee to non-fair trade
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee - Correct
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Re: Economist: Paying extra for fair-trade coffee—coffee labeled with the
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08 Jun 2017, 22:00
A this otion asks the question which seems genaralised.. B the proportionate value of fair trade and non fairtrade coffee has to be known before arriving at the conclusion of the argument hence CORRECT. C irrelavant as we are only concerned about faming of coffee and other kinds of farming is redundant here. D A mere restatement of the question here... (disclaimer: if this question was of the EXCEPT kind.. then this will be the correct answer) E Once again a generalised question similar to A ... Hencce the correct answer is B
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09 Jun 2017, 08:00
Can someone please explain why A is wrong ? As per A, if hoarding is a way, then there would not be much impact on the prices of non fair trade coffee and hence the profits of such coffee farmers could remain stable. As per B, if only 2 out of 100 farmers grow fair trade coffee, and these 2 farmers maintain the large supply of fair trade coffee. I dont find a co-relation between this fact and the impact on profits of non-fair trade coffee farmers.
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31 Jul 2017, 04:27
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katelyntanglu wrote:
the same question, why A is wrong.
At first, I chose B and then I was thinking that A seemed reasonable. And I changed my idea...
In my opinion, A is wrong because it does not focus on the central argument of the conclusion: Conclusion is that: Paying extra for fair-trade coffee lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers. choice A: Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits. this choices focus on the way to decrease the impact of Paying extra for fair-trade coffee. It accept the impacts of Paying extra for fair-trade coffee and does not help us to determine whether Paying extra for fair-trade coffee will lower the profits or not. Analogy for this: children who watch so much television reduce extracurricular activities. evaluate this: -choice A same as: are there any way to reduce the impact of watching too much television.
Re: Economist: Paying extra for fair-trade coffee—coffee labeled with the
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31 Jul 2017, 10:41
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hazelnut wrote:
Economist: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. But this practice may hurt more farmers in developing nations than it helps. Why would it only hurt farmers in developing nations? Is there an assumption that majority farmers in developing nations grow non-fair trade coffee? By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
The economist has basically assumed that most farmers in developing nations grow non-fair trade coffee, and increasing the price for fair trade coffee will hurt their profits. So we should figure out the split between farmers that grow fair-trade Vs. non-fair trade coffee.
To evaluate the strength of the economist's argument, it would be the most helpful to know which of the following?
Quote:
(A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits (C) Whether many coffee farmers in developing nations also derive income from other kinds of farming (D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers
These 3 are irrelevant to the the argument stated by the economist. For e.g. (D) is good as a debate in real life, but in the case of this argument, it makes little sense to evaluate if the consumer should pay extra or not, and it certainly doesn't tie in with the economist's assumption. All 3 of them are OUT.
Quote:
(E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers
In my opinion, this doesn't not help address the economist's argument in any way. This is actually stating we look for an alternative strategy to help fair-trader farmers without hurting non-fair trade farmers. And this seem to be edging a little out of bounds for this argument.
Quote:
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee
This will exactly help us evaluate the economist's argument. If the majority of farmers produce fair-trade coffee in developing nations, then the price increase should help them.
Economist: Paying extra for fair-trade coffee—coffee labeled with the
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31 Aug 2017, 19:34
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If you deconstruct the argument into its premises (P), counter premise (CP) and conclusion (C) you get the following CP: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. C (Author's Main Conclusion): But this practice may hurt more farmers in developing nations than it helps. P: By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. P: This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
To evaluate the strength of the economist's argument, We need to verify the conclusion i.e. whether this practices hurts more farmers in developing countries than it helps
This is indicated in the correct answer B (B) What proportion of coffee farmers in developing nations produce fair-trade coffee- If fewer farmers produce fair trade coffee, then it does not hurt "more" farmers than it helps
The other choices do not focus on the "How Many" (More or Less) aspect from this practice (A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits- Even if there was no way to help them, it does not address the conclusion "whether more farmers are affected or not" (C) Whether many coffee farmers in developing nations also derive income from other kinds of farming- does not focus on the practice in question, while other options might alleviate any negative impact on their income but it does not evaluate the how many are affected by this practice. (D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers- again does not address the conclusion (E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers- focusing on how they could be helped otherwise does not evaluate whether the practice is helpful or not
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28 Sep 2017, 21:50
abhishekaqsais wrote:
Even if the proportion is known, won't the profits of non-fair trade coffee farmers get affected?
Not necessarily.
In Choice B we get to know the proportion of fair-trade and non fair-trade coffee. Let's take a few cases to understand.
CASE 1: Fair Trade Coffee: 1%; Non Fair Trade Coffee: 99% The higher priced Fair Trade Coffee has such low volume that it won't affect prices of Non Fair Trade Coffee. Hence profits for non-fair-trade coffee farmers aren't lowered and argument is weakened.
CASE 2:
Fair Trade Coffee: 60%; Non Fair Trade Coffee: 40% The higher priced Fair Trade Coffee has decent volume and will affect prices of Non Fair Trade Coffee. Hence profits for non-fair-trade coffee farmers are lowered and argument is strengthened.
Economist: Paying extra for fair-trade coffee—coffee labeled with the Fairtrade logo—is intended to help poor farmers, because they receive a higher price for the fair-trade coffee they grow. But this practice may hurt more farmers in developing nations than it helps. By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
To evaluate the strength of the economist's argument, it would be the most helpful to know which of the following?
(A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee
(C) Whether many coffee farmers in developing nations also derive income from other kinds of farming
(D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers
(E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers
Of all the options, only B says something related to both fair trade and non-fair trade production. Notice the prompt mentions that one group of farmers may be hurt by the action of the other group of farmers. In order to evaluate the strength of this argument, one simply needs the proportion of one group to another.
Options A, D, E are wrong as they offer recommendations/solutions to solve the problem and not evaluations, leading words are whether and should/could. Option C, on the other hand, is simply out of scope.
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17 Jul 2018, 00:56
Yes, it may hurt the profits of non- fair-trade coffee farmers but we are not concerned about it since we have to evaluate the strength of the argument, it would be most helpful to know about the proportion of coffee farmers in developing nations who produce fair-trade coffee.
abhishekaqsais wrote:
Even if the proportion is known, won't the profits of non-fair trade coffee farmers get affected?
Correct Answer: B
Hope this makes sense. _________________
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Re: Economist: Paying extra for fair-trade coffee—coffee labeled with the
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04 Aug 2018, 19:40
XYZABCABC - Most replies are really helpful, but here a helpful compilation for you. hope it will be helpful.
Premise: 1. So there are two type of coffee in question - fair-trade(Brand name) and other. Fair trade coffee has higher price. The higher price goes in poor farmer's hands. Noble cause indeed. 2. But this practice may hurt more farmers in developing nations than it helps. How? By raising average prices for coffee, it encourages more coffee to be produced than consumers want to buy. This lowers prices for non-fair-trade coffee and thus lowers profits for non-fair-trade coffee farmers.
Pre-think: We need to evaluate the argument of economist. So what option is on the lines of hurting farmers by lowering profit. Basically how this practice is hurting farmers ? Best thing is look into this process, How this process is really doing what it says to does. how it is hurting farmers. So price will rise when supply is too much then demand. many farmers are growing coffee.
To evaluate the strength of the economist's argument, it would be the most helpful to know which of the following?
(A) Whether there is a way of alleviating the impact of the increased average prices for coffee on non-fair-trade coffee farmers' profits ---- Even if there is we are looking for this strategy and its impacts.
(B) What proportion of coffee farmers in developing nations produce fair-trade coffee --- if high number of farmer are growing coffee it is going to impact supply and so does the price. but if few farmers are growing raising price will not impact supply and so does not hurt price. correct answer
(C) Whether many coffee farmers in developing nations also derive income from other kinds of farming --- even if he does will it impact price/supply. No
(D) Whether consumers should pay extra for fair-trade coffee if doing so lowers profits for non-fair-trade coffee farmers --- that is a moral issue not significant for out price/supply situation.
(E) How fair-trade coffee farmers in developing nations could be helped without lowering profits for non-fair-trade coffee farmers --- even if they can be helped it will not do much for our situation of supply/price.
B is best answer.
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Re: Economist: Paying extra for fair-trade coffee—coffee labeled with the
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13 Apr 2019, 06:24
So, this is how I interpreted the question. the argument the practice of by paying extra for fair-trade coffee hurts farmers in general right. And we need to decide which is helpful to evaluate the economists argument by looking for reasons that would be helpful to determine whether paying extra for fair-trade coffee hurts farmers.
Hence I chose option A as the answer. I am not able to understand why option B helps in evaluating the argument. Please help to shed some light on this! thank you.
gmatclubot
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61% (02:11) correct 
