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

 It is currently 19 Oct 2019, 08:13

### 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

# Farmers in developing countries claim that the United States governmen

Author Message
TAGS:

### Hide Tags

Senior Manager
Joined: 02 Mar 2006
Posts: 466
Location: France
Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

Updated on: 14 May 2018, 06:54
4
20
00:00

Difficulty:

65% (hard)

Question Stats:

63% (02:04) correct 37% (02:26) wrong based on 684 sessions

### HideShow timer Statistics

Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

(A) Wheat that is not processed for consumption can be used for certain industrial applications.

(B) Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.

(C) The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.

(D) Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

(E) The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

Originally posted by karlfurt on 21 Nov 2006, 10:27.
Last edited by hazelnut on 14 May 2018, 06:54, edited 3 times in total.
Formatted the question.
Current Student
Joined: 19 Mar 2012
Posts: 4263
Location: India
GMAT 1: 760 Q50 V42
GPA: 3.8
WE: Marketing (Non-Profit and Government)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

28 Jan 2016, 11:57
1
5
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

A. Wheat that is not processed for consumption is often used for certain industrial applications.

B. Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.

C. The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.

D. Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

E. The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.
_________________
Senior Manager
Joined: 21 Oct 2013
Posts: 411
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

23 Mar 2014, 09:25
4
3
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

A) Wheat that is not processed for consumption can be used for certain industrial applications.
B) Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
C) The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
D) Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.
E) The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

Farmers in developing countries claim that the global price of wheat is low because American farmers produce too much of the grain. They also claim that American farmers produce too much wheat because they have no incentive to manage their crops, since the U.S. government will buy whatever wheat American farmers cannot sell on the open market. We are asked to find a choice that weakens the claims of the farmers in developing countries that removing the American subsidy would cause the price of wheat to rise.

(D) CORRECT. The farmers assume that the sole cause of the wheat surplus is the United States. This answer choice suggests that other countries would modify their output to counterbalance any reduction on the part of the United States, keeping prices constant instead of allowing them to rise.

I understand that it gives alternative reason why US farmer is not responsible for the global price of wheat.
Thanks,
##### General Discussion
VP
Joined: 15 Jul 2004
Posts: 1032
Schools: Wharton (R2 - submitted); HBS (R2 - submitted); IIMA (admitted for 1 year PGPX)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 10:37
1
karlfurt wrote:
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

Wheat that is not processed for consumption can be used for certain industrial applications.
Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.
The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

It appears to be A - though I am not sure.

Here's my reasoning -

The main argument is this -
Farmers don't regulate the amount of wheat they produce - because whatever is left over from the non-sales on the global market is brought over by the US Govt. Hence US Govt is indirectly responsible for low wheat price.

A brings a new element by saying - "wheat not processed for consumption" has industrial application - hence it is possible that the farmers actually produce CONSUMABLE and NON CONSUMABLE wheat - the latter being purchased by the Govt for Industrial applications.
Director
Joined: 21 Aug 2006
Posts: 803
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 10:57
1
karlfurt wrote:
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

Wheat that is not processed for consumption can be used for certain industrial applications.

I think open market will include both consumption and use in industrial applications.

Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

I think D is the answer. Even if the US were to reduce to production, other countries will increase, and the price will remain at the same level.

The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

_________________
The path is long, but self-surrender makes it short;
the way is difficult, but perfect trust makes it easy.
Senior Manager
Joined: 17 Oct 2006
Posts: 344
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 11:20
Agree with D....nice explaination given above by ak_idc
VP
Joined: 15 Jul 2004
Posts: 1032
Schools: Wharton (R2 - submitted); HBS (R2 - submitted); IIMA (admitted for 1 year PGPX)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 11:32
1
ak_idc wrote:
karlfurt wrote:
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

Wheat that is not processed for consumption can be used for certain industrial applications.

I think open market will include both consumption and use in industrial applications.

Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

I think D is the answer. Even if the US were to reduce to production, other countries will increase, and the price will remain at the same level.

The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

I agree...

I got mislead because I thought the argument was focused on the role of the US Govt..and the fact that because it buys excess wheat the price is low. D is clearly the choice if the focus is on QTY PRICE EQUATION. Other countries would still balance out the Quantity of wheat available...

I still feel there's a trap in D.

Karl brother..help us with the OA..
Manager
Joined: 01 Oct 2006
Posts: 202
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 12:45
1
Agree with D.

A - Farmers are producing more wheat now because there is a guarantee that excess wheat will be bought. Industrial applications may already be consuming wheat. And there is no guarantee that all the extra wheat will be used by Industrial application
B - irrelevant
C - not right to compare soyabean price with that of wheat. teh 2 commodities can't be expected to cost the same
E - same as C
Senior Manager
Joined: 17 Aug 2005
Posts: 337
Location: Boston, MA
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 18:25
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Quantity of wheat is what keeps the price low (or oversupplied by American farmers). If US farmers reduce wheat ouput, others will produce more, therefore quantity/price relationship stays same.

Director
Joined: 28 Dec 2005
Posts: 822
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

21 Nov 2006, 18:41
I still think it's C.

dwivedys, why is it wrong to focus on the role of the US govt? The first sentence says: Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat.

So, they are clearly blaming the US govt. for the subsidies offered and the resulting low price.

Agreed soy is another product, but if evrything were governed by supply being far greater than demand, then soy should be around the same price, dont you think?
Manager
Joined: 01 Sep 2006
Posts: 235
Location: Phoenix, AZ, USA
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

22 Nov 2006, 01:17
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

Wheat that is not processed for consumption can be used for certain industrial applications. Out of Scope
Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance. Not relayted
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat. This cast doubt that susidy is causing lower prices
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output. Not related
The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat. Oout of scope
Manager
Joined: 08 Oct 2006
Posts: 157
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

22 Nov 2006, 19:15
A is wrong as global consumption is low so that assumes that industries are already using it.
C and E are wrong as comparisons are always wrong on GMAT.
B is irrelevant.
D is the answer- I believe.

Wheat that is not processed for consumption can be used for certain industrial applications.
Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.
The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.
Manager
Joined: 14 Nov 2008
Posts: 57
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

01 Sep 2013, 10:36
1
Farmers in developing countries claim that the global price of wheat is low
because American farmers produce too much of the grain. They also claim that
American farmers produce too much wheat because they have no incentive to
manage their crops, since the U.S. government will buy whatever wheat
American farmers cannot sell on the open market. We are asked to find a choice
that weakens the claims of the farmers in developing countries that removing the
American subsidy would cause the price of wheat to rise.
(A) That there are uses for wheat that is not eaten is irrelevant here. This does
not address any aspect of the farmers' claims.
(B) The fact that buyers of wheat can predict their needs in advance is irrelevant
here, because the text indicates that American farmers do not pay attention to
actual demand for wheat.
(C) In this argument, the global market for soybeans is irrelevant to the global
market for wheat, which is a different commodity with different demand, supply,
and pricing structures.
(D) CORRECT. The farmers assume that the sole cause of the wheat surplus is
the United States. This answer choice suggests that other countries would
modify their output to counterbalance any reduction on the part of the United
States, keeping prices constant instead of allowing them to rise.
(E) The price of another crop is largely irrelevant. Moreover, the fact that the
price of sorghum, a non-subsidized crop, is lower tends to support, rather than
weaken, the claims of the farmers.
Manager
Joined: 05 Nov 2012
Posts: 138
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

23 Mar 2014, 10:45
5
Hello goodyear, I am happy to help.
First lets break down the stem. Let ourselves be the farmers of developing countries. What are we saying?
1) We say that American govt offers subsidies for their farmers through buying all the additional crop that is left unsold. So American farmers aren't controlling their output
2) Because there is more production for a particular demand, the prices of wheat are coming down.
3) Conclusion: Without subsidies, American farmers will occur loss for any crop unsold and so they will start producing what is needed, hence increasing the wheat price (for a given demand if the production is less, the prices will rise)

So what can be said in order to shut our mouths criticizing American govt?

A) In the entire topic we are not talking about increasing or decreasing demand. We were concerned that whatever the demand is American farmers are producing more, hence bringing down the price of wheat. So reject this option.
B) Non-government buyers are able to predict the demand for wheat. Again, amount of demand is not the topic under discussion. Reject
C) Soybean? Do you really think showing an example of soybean is going to stop us from making the same statement? How can you compare Soybean and wheat? Their demand, production models may be different. Reject
D) Even if America stops its production, other countries will produce more wheat. Whether it is America or other country, we do not bother. Our concern is wheat is produced more than demand and so prices are lower. In any case, some country or the other is producing more wheat, so how can our attack on American to stop subsidizing (more wheat production) is going to help our case? Contender
E) Follows the same reasoning as C. Reject.

You can also look in to this question as a cause and effect model.
Cause= American subsidies are encouraging more production of wheat
Effect= Prices are lesser
If we can find another cause to the effect we can weaken the argument.
Another cause is not just America, even Canada and Russia produces more wheat. So again D is the answer.
Director
Status: Everyone is a leader. Just stop listening to others.
Joined: 22 Mar 2013
Posts: 710
Location: India
GPA: 3.51
WE: Information Technology (Computer Software)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

03 Apr 2014, 09:35
D. Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

How can we assume that farmers of Canada and Russia would get same type of subsidies and they will replicate the similar production model like American. consequence will bring down the cost of wheat.
_________________
Piyush K
-----------------------
Our greatest weakness lies in giving up. The most certain way to succeed is to try just one more time. ― Thomas A. Edison
Don't forget to press--> Kudos
My Articles: 1. WOULD: when to use? | 2. All GMATPrep RCs (New)
Tip: Before exam a week earlier don't forget to exhaust all gmatprep problems specially for "sentence correction".
Manager
Status: suffer now and live forever as a champion!!!
Joined: 01 Sep 2013
Posts: 102
Location: India
GPA: 3.5
WE: Information Technology (Computer Software)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

03 Apr 2014, 12:04
1
First of all a very good question.

Assumption for this question is
"Low production/Sufficient Production of wheat by American farmers -> High global price of wheat".

We need to attack this assumption .
We need an argument that states even though American farmers produced low wheat , there was a low global price.

Choice D does that by stating Eventhough American farmers reduce their output, countries such as canada and Russia
are likely to produce more wheat.

As far as Choice C is concerned , it is no way affecting our assumption.

Please give kudos if this helps
Director
Status: Everyone is a leader. Just stop listening to others.
Joined: 22 Mar 2013
Posts: 710
Location: India
GPA: 3.51
WE: Information Technology (Computer Software)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

04 Apr 2014, 06:22
1
I think D strengthens the argument, if USA and it's subsidies are responsible for high output and if USA stops giving subsidy to its farmer, then consequently output will reduce and then to fill the void Russia and Canada will produce more wheat.. don't you think its indirectly accepting that USA was responsible for low wheat prices and through its subsidies it was producing high output... I think it strengthens the claims of farmer... let any country jump into later to fill the void ... but farmers claim looks plausible ... statement validate their claim .. indirectly.
_________________
Piyush K
-----------------------
Our greatest weakness lies in giving up. The most certain way to succeed is to try just one more time. ― Thomas A. Edison
Don't forget to press--> Kudos
My Articles: 1. WOULD: when to use? | 2. All GMATPrep RCs (New)
Tip: Before exam a week earlier don't forget to exhaust all gmatprep problems specially for "sentence correction".
Manager
Joined: 26 May 2013
Posts: 52
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

15 Apr 2014, 17:25
I still believe the answer is C. Our assumption is, its the Subsidy which is causing the price control. If we can prove that in spite of offering a subsidy, a crop's price can be left to global demand, we have weakened the argument.
Manager
Joined: 10 Mar 2013
Posts: 167
GMAT 1: 620 Q44 V31
GMAT 2: 690 Q47 V37
GMAT 3: 610 Q47 V28
GMAT 4: 700 Q50 V34
GMAT 5: 700 Q49 V36
GMAT 6: 690 Q48 V35
GMAT 7: 750 Q49 V42
GMAT 8: 730 Q50 V39
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

09 Aug 2014, 19:38
Confirmed that the OA is indeed D.
Senior Manager
Joined: 17 Sep 2013
Posts: 322
Concentration: Strategy, General Management
GMAT 1: 730 Q51 V38
WE: Analyst (Consulting)
Re: Farmers in developing countries claim that the United States governmen  [#permalink]

### Show Tags

09 Aug 2014, 22:04
karlfurt wrote:
Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

Wheat that is not processed for consumption can be used for certain industrial applications.
Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.
The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.
Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.
The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

Claim- American farmers are subsidized for xtra production....Hence more supply less demand..prices low..if not..farmers wont be able to sell in open market..supply reduced..same demand..prices increase..

A- No where has supply or demand been associated with just food consumption..
B- If they are..it does not matter as they will anyways not consume more than or less than required..So it does not conclude to anything
C- What if it does..it does not falter the claim that wheat prices wont rice..there might be other genuine reasons such as Floods in soyabean field etc..
D- If supply by american farmers is reduced-->supply reduced-->this chain is now broken as supply gap would be taken care of by china & russia..so prices wont increase now
E- Similar case as in C..
_________________
Appreciate the efforts...KUDOS for all
Don't let an extra chromosome get you down..
Re: Farmers in developing countries claim that the United States governmen   [#permalink] 09 Aug 2014, 22:04

Go to page    1   2    Next  [ 39 posts ]

Display posts from previous: Sort by