GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

 It is currently 24 Jan 2020, 10:10

### 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

# For similar homes and comparable residents, home insurance for theft

Author Message
TAGS:

### Hide Tags

Current Student
Joined: 06 Jul 2016
Posts: 38
Location: India
Concentration: Operations, General Management
GMAT 1: 610 Q49 V25
WE: General Management (Energy and Utilities)
For similar homes and comparable residents, home insurance for theft  [#permalink]

### Show Tags

Updated on: 13 Aug 2019, 22:42
1
3
00:00

Difficulty:

5% (low)

Question Stats:

86% (01:17) correct 14% (01:37) wrong based on 286 sessions

### HideShow timer Statistics

For similar homes and comparable residents, home insurance for theft has always cost more in Springfield than in Shelbyville. Police studies, however, show that homes owned by Springfield residents are, on average, slightly less likely to be robbed than homes in Shelbyville. Clearly, therefore, insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville.

In evaluating the argument, it would be most useful to compare

(A) the population density of Springfield with the population density of Shelbyville

(B) the cost of compensating theft losses in Springfield with the cost of compensating theft losses in Shelbyville

(C) the rates Springfield residents pay for auto insurance with the rates paid for auto insurance by residents of Shelbyville

(D) the condition of Springfield's roads and streets with the condition of Shelbyville's roads and streets

(E) the cost of home theft insurance in Springfield and Shelbyville with that in other cities

Originally posted by amulya619 on 14 Oct 2016, 23:59.
Last edited by Bunuel on 13 Aug 2019, 22:42, edited 3 times in total.
Edited the question.
Current Student
Joined: 28 Nov 2014
Posts: 812
Concentration: Strategy
Schools: Fisher '19 (M\$)
GPA: 3.71
Re: For similar homes and comparable residents, home insurance for theft  [#permalink]

### Show Tags

15 Oct 2016, 01:25
If the cost of compensating the home theft losses in Springfield is more than the cost of compensating the home theft losses in Shelbyville, even when the homes owned by Springfield residents are slightly less likely to be robbed than the homes owned by Shelbyville residents, we cannot assuredly say if the home insurance companies are making a greater profit in Springfield. Taking this option to two extremes strengthen as well as weaken the argument!

Therefore, pick D.
Director
Joined: 06 Jan 2015
Posts: 714
Location: India
Concentration: Operations, Finance
GPA: 3.35
WE: Information Technology (Computer Software)
Re: For similar homes and comparable residents, home insurance for theft  [#permalink]

### Show Tags

01 Aug 2017, 22:18
D.the condition of Springfield's roads and streets with the condition of Shelbyville's roads and streets-Out of scope

Ans is B
_________________
आत्मनॊ मोक्षार्थम् जगद्धिताय च

Resource: GMATPrep RCs With Solution
Manager
Joined: 29 Oct 2015
Posts: 237
Re: For similar homes and comparable residents, home insurance for theft  [#permalink]

### Show Tags

20 Apr 2019, 19:14
amulya619 wrote:
For similar homes and comparable residents, home insurance for theft has always cost more in Springfield than in Shelbyville. Police studies, however, show that homes owned by Springfield residents are, on average, slightly less likely to be robbed than homes in Shelbyville. Clearly, therefore, insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville.

In evaluating the argument, it would be most useful to compare

A. the population density of Springfield with the population density of Shelbyville

B. the cost of compensating theft losses in Springfield with the cost of compensating theft losses in Shelbyville

C. the rates Springfield residents pay for auto insurance with the rates paid for auto insurance by residents of Shelbyville

D. the condition of Springfield's roads and streets with the condition of Shelbyville's roads and streets

E. the cost of home theft insurance in Springfield and Shelbyville with that in other cities

Use variance technique...

Conclusion :- insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville.

Option B -->

YES..the cost of compensating theft losses in Springfield is greater than the cost of compensating theft losses in Shelbyville.

The conclusion gets HURT.

We cant conclude that "insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville."

No...the cost of compensating theft losses in Springfield is not greater than the cost of compensating theft losses in Shelbyville.

But the home insurance for theft has always cost more in Springfield than in Shelbyville. So We can conclude that "insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville."

The conclusion gets HELPED.

Please give me kudo s if you liked my explanation.
Math Expert
Joined: 02 Sep 2009
Posts: 60647
Re: For similar homes and comparable residents, home insurance for theft  [#permalink]

### Show Tags

20 Aug 2019, 00:03
amulya619 wrote:
For similar homes and comparable residents, home insurance for theft has always cost more in Springfield than in Shelbyville. Police studies, however, show that homes owned by Springfield residents are, on average, slightly less likely to be robbed than homes in Shelbyville. Clearly, therefore, insurance companies are making a greater proﬁt on home theft insurance in Springfield than in Shelbyville.

In evaluating the argument, it would be most useful to compare

(A) the population density of Springfield with the population density of Shelbyville

(B) the cost of compensating theft losses in Springfield with the cost of compensating theft losses in Shelbyville

(C) the rates Springfield residents pay for auto insurance with the rates paid for auto insurance by residents of Shelbyville

(D) the condition of Springfield's roads and streets with the condition of Shelbyville's roads and streets

(E) the cost of home theft insurance in Springfield and Shelbyville with that in other cities

OFFICIAL EXPLANATION:

Reading the question: we can use opinion-charged words to identify the pieces of the argument here. "Clearly" introduces the conclusion. The word "however" also is a clue: it tells us that the first sentence is a data point, not just filler. The logical structure is: A is true, but B is true, therefore C is true. A is the difference in cost in home insurance between these two cities, B is the rate of theft. The argument is not too strong.

Creating a filter: as the page summarizing the Critical Reasoning Strategy mentions, a prediction of the correct answer, even a vague or unrealistic prediction, is most powerful filter to evaluate answer choices. Predicting isn't always easy, but on this question, there are many reasons why insurance companies might have to pay more for losses in Springfield than in Shelbyville. Maybe the thieves in Springfield are more skilled and they manage to steal more per theft than in Shelbyville. That possibility is unlikely to be an answer choice, but we can still use it: "thieves in Springfield are more skilled and steal more."

Applying the filter, we evaluate the answer choices. Choice (B) is actually pretty close to our prediction. Choice (C) involves auto rates, which wouldn't shed light on this question without further information. (D) and (E) also involve comparisons with other things that we know nothing about, so they cause problems rather than solve problems. Back to (A), we can see it doesn't directly concern whether companies profit more from fewer thefts. Notice that our prediction was quite different from choice (B), but it was similar enough to help us spot (B) quickly.

Logical proof: we can use analysis by extreme cases to establish that choice (B) is correct. If the losses per theft were identical in Shelbyville and in Springfield, the conclusion would be true and the argument would stand; if they were wildly different, the conclusion could be false.

_________________
Re: For similar homes and comparable residents, home insurance for theft   [#permalink] 20 Aug 2019, 00:03
Display posts from previous: Sort by