GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 16 Oct 2019, 07:30

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Economist: Paying extra for fair-trade coffee—coffee labeled with the

Author Message
TAGS:

### Hide Tags

Senior SC Moderator
Joined: 14 Nov 2016
Posts: 1348
Location: Malaysia

### Show Tags

27 May 2017, 20:25
6
70
00:00

Difficulty:

65% (hard)

Question Stats:

62% (02:12) correct 38% (02:38) wrong based on 2129 sessions

### HideShow timer Statistics

The Official Guide for GMAT Verbal Review 2018

Practice Question
Question No.: CR162
Page: 147

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

_________________
"Be challenged at EVERY MOMENT."

“Strength doesn’t come from what you can do. It comes from overcoming the things you once thought you couldn’t.”

"Each stage of the journey is crucial to attaining new heights of knowledge."

Intern
Status: DA VERBAL OG
Joined: 21 Jun 2017
Posts: 17
Location: United States

### Show Tags

31 Jul 2017, 10:04
18
1
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!

Posted from my mobile device

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.
_________________
★ writer ★

married to ron
##### General Discussion
Current Student
Joined: 18 Aug 2016
Posts: 609
Concentration: Strategy, Technology
GMAT 1: 630 Q47 V29
GMAT 2: 740 Q51 V38

### Show Tags

28 May 2017, 00:46
2
hazelnut wrote:
The Official Guide for GMAT Verbal Review 2018

Practice Question
Question No.: CR162
Page: 147

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)

Hence (B)
_________________
We must try to achieve the best within us

Thanks
Luckisnoexcuse
Verbal Forum Moderator
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2400
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)

### Show Tags

31 May 2017, 06:36
3
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
_________________
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
Manager
Joined: 21 Nov 2016
Posts: 70
GMAT 1: 640 Q47 V31

### Show Tags

08 Jun 2017, 22:00
1
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
Intern
Joined: 03 Sep 2016
Posts: 23
Location: India
GMAT 1: 660 Q49 V35
GPA: 3

### Show Tags

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.

Many many thanks!

Posted from my mobile device
Intern
Joined: 18 Jul 2017
Posts: 13

### Show Tags

30 Jul 2017, 01:55
1
1
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...
Manager
Joined: 21 Dec 2014
Posts: 67
Location: Viet Nam
Concentration: Entrepreneurship, General Management
Schools: Olin '21 (A\$)
GMAT 1: 710 Q49 V37
GPA: 3.8
WE: Other (Other)

### Show Tags

31 Jul 2017, 04:27
8
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.

Happy to share my idea
_________________
Just calm and try.
DON'T QUIT!
Senior Manager
Joined: 06 Jul 2016
Posts: 358
Location: Singapore
Concentration: Strategy, Finance

### Show Tags

31 Jul 2017, 10:41
1
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.

_________________
Put in the work, and that dream score is yours!
Intern
Joined: 11 Sep 2016
Posts: 5

### Show Tags

31 Aug 2017, 16:00
Even if the proportion is known, won't the profits of non-fair trade coffee farmers get affected?
Current Student
Joined: 18 Jan 2017
Posts: 82
Location: India
Concentration: Finance, Economics
GMAT 1: 700 Q50 V34

### Show Tags

31 Aug 2017, 19:34
2
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

Hope this helps!
GMAT Club Verbal Expert
Joined: 20 Nov 2016
Posts: 255

### Show Tags

01 Sep 2017, 20:42
Thanks for all of the great replies!

_________________
Manager
Joined: 07 Jun 2017
Posts: 161
Location: India
Concentration: Technology, General Management
GMAT 1: 660 Q46 V38
GPA: 3.6
WE: Information Technology (Computer Software)

### Show Tags

01 Sep 2017, 21:16
B is the answer, whether it is smaller portion or larger portion we need to figure, to evaluate.

from- nkmungila
_________________
Regards,
Naveen
email: nkmungila@gmail.com
Please press kudos if you like this post
Intern
Joined: 20 Sep 2015
Posts: 16
Location: India
GMAT 1: 700 Q48 V37

### Show Tags

28 Sep 2017, 21:50
1
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:
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:

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.
Manager
Joined: 03 May 2017
Posts: 86

### Show Tags

29 Sep 2017, 21:09
2
1
hazelnut wrote:
The Official Guide for GMAT Verbal Review 2018

Practice Question
Question No.: CR162
Page: 147

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.

Intern
Joined: 09 Aug 2017
Posts: 18
Location: India
GMAT 1: 700 Q49 V37
GPA: 3.71

### Show Tags

26 Oct 2017, 07:54
2
To those who are confused with A: Option A already assumes that the conclusion is valid. Whereas our purpose here is to evaluate the argument.
Manager
Joined: 10 May 2018
Posts: 120
Concentration: Finance, Sustainability

### Show Tags

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?

Hope this makes sense.
_________________
Stuck in the 600-700 score bracket? I welcome you to read my four-step course of action to a modest score.
I also invite you to critique and help me find flaws in my modus operandi. Thanks!
Intern
Joined: 08 May 2018
Posts: 24

### Show Tags

22 Jul 2018, 11:11
Hi Verbal Experts,

Can you please provide detailed explanation for this question? I am particularly stuck at A, B and E.

SC Moderator
Joined: 23 Sep 2015
Posts: 1716

### Show Tags

04 Aug 2018, 19:40
1
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.

_________________
Thanks!
Do give some kudos.

Simple strategy:
“Once you’ve eliminated the impossible, whatever remains, however improbable, must be the truth.”

GMAT Ninja YouTube! Series 1| GMAT Ninja YouTube! Series 2 | How to Improve GMAT Quant from Q49 to a Perfect Q51 | Time management

My Notes:
Reading comprehension | Critical Reasoning | Absolute Phrases | Subjunctive Mood
Manager
Joined: 22 Sep 2018
Posts: 63

### Show Tags

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.
Re: Economist: Paying extra for fair-trade coffee—coffee labeled with the   [#permalink] 13 Apr 2019, 06:24

Go to page    1   2    Next  [ 25 posts ]

Display posts from previous: Sort by