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TaN1213
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Excluding purchases by businesses, the average amount spent 06 Dec 2017, 04:28
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48% (02:13) correct 52% (02:24) wrong based on 641 sessions

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Excluding purchases by businesses, the average amount spent on a factory-new car has risen 30 per- cent in the last five years. In the average household budget, the proportion spent on car purchases has remained unchanged in that period. Therefore the average household budget must have increased by 30 percent over the last five years.

Which of the following is an assumption on which the argument relies?

(A) The average number of factory-new cars purchased per household has remained unchanged over the last five years.

(B) The average amount spent per car by businesses buying factory-new cars has risen 30 percent in the last five years.

(C) The proportion of the average household budgetspent on all car-related expenses has remained unchanged over the last five years.

(D) The proportion of the average household budget spent on food and housing has remained unchanged over the last five years.

(E) The total amount spent nationwide on factory new cars has increased by 30 percent over the last five years.
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Excluding purchases by businesses, the average amount spent 06 Dec 2017, 04:39
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D. If proportion of other budgets change then overall budget will grow/reduce by some other amount

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Excluding purchases by businesses, the average amount spent 06 Dec 2017, 10:09
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ANSWER should be E.Total amount will be increased by 30pc
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Excluding purchases by businesses, the average amount spent 06 Dec 2017, 10:22
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TaN1213
Excluding purchases by businesses, the average amount spent on a factory-new car has risen 30 per- cent in the last five years. In the average household budget, the proportion spent on car purchases has remained unchanged in that period. Therefore the average household budget must have increased by 30 percent over the last five years.

Which of the following is an assumption on which the argument relies?

(A)The average number of factory-new cars purchased per household has remained unchanged over the last five years.

(B)The average amount spent per car by businesses buying factory-new cars has risen 30 percent in the last five years.

(C)The proportion of the average household budgetspent on all car-related expenses has remained unchanged over the last five years.

(D)The proportion of the average household budget spent on food and housing has remained unchanged over the last five years.

(E)The total amount spent nationwide on factory new cars has increased by 30 percent over the last five years.



Clearly A..

let A be not true
If every household is buying two cars on average whereas earlier it was one car, the following will be the case..

Budget 1000 earlier
20% was being spent on car, so 200
each car costed 200 then

but now it has become 200*1.3=260..
and each house buys 2 cars so 260*2=520...
But 520 is 20% still, so 20% of new budget = 520, so budget = 2600
this increase is almost 160% and NOT 30%

so A has to be true
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Excluding purchases by businesses, the average amount spent 06 Dec 2017, 23:17
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chetan2u
TaN1213
Excluding purchases by businesses, the average amount spent on a factory-new car has risen 30 per- cent in the last five years. In the average household budget, the proportion spent on car purchases has remained unchanged in that period. Therefore the average household budget must have increased by 30 percent over the last five years.

Which of the following is an assumption on which the argument relies?

(A)The average number of factory-new cars purchased per household has remained unchanged over the last five years.

(B)The average amount spent per car by businesses buying factory-new cars has risen 30 percent in the last five years.

(C)The proportion of the average household budgetspent on all car-related expenses has remained unchanged over the last five years.

(D)The proportion of the average household budget spent on food and housing has remained unchanged over the last five years.

(E)The total amount spent nationwide on factory new cars has increased by 30 percent over the last five years.



Clearly A..

let A be not true
If every household is buying two cars on average whereas earlier it was one car, the following will be the case..

Budget 1000 earlier
20% was being spent on car, so 200
each car costed 200 then

but now it has become 200*1.3=260..
and each house buys 2 cars so 260*2=520...
But 520 is 20% still, so 20% of new budget = 520, so budget = 2600
this increase is almost 160% and NOT 30%

so A has to be true
Could you elaborate on this calculate. I am very curious to learn this.

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Excluding purchases by businesses, the average amount spent 07 Dec 2017, 05:55
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Option A.

Total money spent on cars , excluding business purchases (X) = Price per car (A) * No. of cars per household (B) * No. of households (C)

Average money spent on cars = X / (B*C) [ This figure has gone up by 30%) .............. (i)

Proportion of car expenses from the average household expense = constant

=> (X/C ) / (Total household expense/C) = constant ........... (ii)

As per the conclusion, the denominator of the above expression = total household expense/C = avg household expense has gone up by 30% ...... (iii)

For the conclusion to be valid, putting (ii) and (iii) together, the numerator X/C also needs to increase by 30%.

Hence in (i), B (no of cars per household) has to be constant

Hope this explains !
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Excluding purchases by businesses, the average amount spent 13 May 2024, 03:42
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I think option A is correct
Logically speaking IF the number of cars per household, if the number of cars per household did increase (say from 2 to 4) then the proportion of budget on car will increase.. this goes against what the author states " average household budget, the proportion spent on car purchases has remained unchanged in that period"
C is wrong because scope of passage is only car purchase NOT all car related expenses (purchase is subset of expenses)
E is wrong because even if total amount spent on car purchases is NOT inc by 30% does not necessarily mean average increased/decreased/stayed same
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Excluding purchases by businesses, the average amount spent 01 Feb 2025, 01:24
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why are you assuming that budget spent on factory new car = cost of the car

it is not given that if budget spent has risen, cost has risen

or let's say that the cost of car has gone up by 30%

with this info, you cannot assume that now they are purchasing 2 cars where earlier it was 1

because if this is true, then we cannot say budget spent on new car has risen by 30% , it will be that budget spent on new car has risen by (130 x 2/100 = 260%) which goes against the premise given

can an expert please clarify this ?

MartyMurray, if you could provide your insights!
chetan2u
TaN1213
Excluding purchases by businesses, the average amount spent on a factory-new car has risen 30 per- cent in the last five years. In the average household budget, the proportion spent on car purchases has remained unchanged in that period. Therefore the average household budget must have increased by 30 percent over the last five years.

Which of the following is an assumption on which the argument relies?

(A)The average number of factory-new cars purchased per household has remained unchanged over the last five years.

(B)The average amount spent per car by businesses buying factory-new cars has risen 30 percent in the last five years.

(C)The proportion of the average household budgetspent on all car-related expenses has remained unchanged over the last five years.

(D)The proportion of the average household budget spent on food and housing has remained unchanged over the last five years.

(E)The total amount spent nationwide on factory new cars has increased by 30 percent over the last five years.



Clearly A..

let A be not true
If every household is buying two cars on average whereas earlier it was one car, the following will be the case..

Budget 1000 earlier
20% was being spent on car, so 200
each car costed 200 then

but now it has become 200*1.3=260..
and each house buys 2 cars so 260*2=520...
But 520 is 20% still, so 20% of new budget = 520, so budget = 2600
this increase is almost 160% and NOT 30%

so A has to be true
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Excluding purchases by businesses, the average amount spent 01 Feb 2025, 17:10
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The amount spent on a car does equal the cost (to the consumer) of a car. It doesn't mean "total car-related spending"; it means "the amount that you paid for one car." The author is telling us that the amount someone pays when the buy one new car has gone up 30%, but that people aren't spending a larger % of their budget on cars. One possible explanation of this is the conclusion the author cones to: budgets are also up 30%. For instance, if new car went from $20k to $26k, maybe the average budget also went up from $100k to $130k, so the cost of a car is still 1/5 the budget.

However, the author has overlooked other possible explanations. Perhaps not as many people are buying new cars, or perhaps people are buying new cars less frequently. If the cost of a car is 13/10 what it was before, but 10/13 as many people per year buy a car, then the average share of a budget allocated to new car purchases will stay the same.
RiyaJ0032
why are you assuming that budget spent on factory new car = cost of the car

it is not given that if budget spent has risen, cost has risen

or let's say that the cost of car has gone up by 30%

with this info, you cannot assume that now they are purchasing 2 cars where earlier it was 1

because if this is true, then we cannot say budget spent on new car has risen by 30% , it will be that budget spent on new car has risen by (130 x 2/100 = 260%) which goes against the premise given

can an expert please clarify this ?

MartyMurray, if you could provide your insights!
chetan2u
TaN1213
Excluding purchases by businesses, the average amount spent on a factory-new car has risen 30 per- cent in the last five years. In the average household budget, the proportion spent on car purchases has remained unchanged in that period. Therefore the average household budget must have increased by 30 percent over the last five years.

Which of the following is an assumption on which the argument relies?

(A)The average number of factory-new cars purchased per household has remained unchanged over the last five years.

(B)The average amount spent per car by businesses buying factory-new cars has risen 30 percent in the last five years.

(C)The proportion of the average household budgetspent on all car-related expenses has remained unchanged over the last five years.

(D)The proportion of the average household budget spent on food and housing has remained unchanged over the last five years.

(E)The total amount spent nationwide on factory new cars has increased by 30 percent over the last five years.



Clearly A..

let A be not true
If every household is buying two cars on average whereas earlier it was one car, the following will be the case..

Budget 1000 earlier
20% was being spent on car, so 200
each car costed 200 then

but now it has become 200*1.3=260..
and each house buys 2 cars so 260*2=520...
But 520 is 20% still, so 20% of new budget = 520, so budget = 2600
this increase is almost 160% and NOT 30%

so A has to be true
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