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# Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing

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Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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09 Jan 2008, 19:08
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Editorial in Krenlandian Newspaper:

Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in many cases because foreign governments subsidize their steel industries in ways that are banned by international treaties. But whatever the cause, the cost is ultimately going to be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies but also industrial employment in Krenland if our government took measures to reduce cheap steel imports.

Which of the following, if true, most seriously weakens the editorial’s argument?

(A) Because steel from Krenland is rarely competitive in international markets, only a very small portion of Krenlandian steelmakers’ revenue comes from exports.

(B) The international treaties that some governments are violating by giving subsidies to steelmakers do not specify any penalties for such violations.

(C) For many Krenlandian manufacturers who face severe international competition in both domestic and export markets, steel constitutes a significant part of their raw material costs.

(D) Because of advances in order-taking, shipping, and inventory systems, the cost of shipping steel from foreign producers to Krenland has fallen considerably in recent years.

(E) Wages paid to workers in the steel industry in Krenland differ significantly from wages paid to workers in many of the countries that export steel to Krenland.
[Reveal] Spoiler: OA

Last edited by hazelnut on 16 Jun 2017, 23:07, edited 3 times in total.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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09 Jan 2008, 19:50
C, because it indicates that any restriction on cheap steel is going to affect the rest of the country's industries.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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09 Jan 2008, 21:15
C
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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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09 Jan 2008, 21:33
ttram wrote:
Editorial in Krenlandian Newspaper:

Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in many cases because foreign governments subsidize their steel industries in ways that are banned by international treaties. But whatever the cause, the cost is ultimately going to be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies but also industrial employment in Krenland if our government took measures to reduce cheap steel imports.

Which of the following, if true, most seriously weakens the editorial’s argument?

A. Because steel from Krenland is rarely competitive in international markets, only a very small portion of Krenlandian steelmakers’ revenue comes from exports.
B. The international treaties that some governments are violating by giving subsidies to steelmakers do not specify any penalties for such violations.
C. For many Krenlandian manufacturers who face severe international competition in both domestic and export markets, steel constitutes a significant part of their raw material costs.
D. Because of advances in order-taking, shipping, and inventory systems, the cost of shipping steel from foreign producers to Krenland has fallen considerably in recent years.
E. Wages paid to workers in the steel industry in Krenland differ significantly from wages paid to workers in many of the countries that export steel to Krenland.

C by POE.

A: what about domestic markets???
B:irrelevant
D: irrelevant
E: wages are irrelevant here.

C: at first I really didnt understand it, but only one left. I believe its because the steel is expensive so the plan is not going to go as the author intended.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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09 Jan 2008, 21:38
GMATBLACKBELT wrote:
ttram wrote:
Editorial in Krenlandian Newspaper:

Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in many cases because foreign governments subsidize their steel industries in ways that are banned by international treaties. But whatever the cause, the cost is ultimately going to be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies but also industrial employment in Krenland if our government took measures to reduce cheap steel imports.

Which of the following, if true, most seriously weakens the editorial’s argument?

A. Because steel from Krenland is rarely competitive in international markets, only a very small portion of Krenlandian steelmakers’ revenue comes from exports.
B. The international treaties that some governments are violating by giving subsidies to steelmakers do not specify any penalties for such violations.
C. For many Krenlandian manufacturers who face severe international competition in both domestic and export markets, steel constitutes a significant part of their raw material costs.
D. Because of advances in order-taking, shipping, and inventory systems, the cost of shipping steel from foreign producers to Krenland has fallen considerably in recent years.
E. Wages paid to workers in the steel industry in Krenland differ significantly from wages paid to workers in many of the countries that export steel to Krenland.

C by POE.

A: what about domestic markets???
B:irrelevant
D: irrelevant
E: wages are irrelevant here.

C: at first I really didnt understand it, but only one left. I believe its because the steel is expensive so the plan is not going to go as the author intended.

You guys are well done. C is the answer. It is said that manufacturers in Krenland needs steel as raw materials to produce their products. Thus, if the government reduce cheap steel import, the manufacturers will not have enough steel to produce => government should not do that => weaken the argument.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 07:18
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Editorial in Krenlandian Newspaper:
Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in
many cases because foreign governments subsidize their steel industries in ways that are
banned by international treaties. But whatever the cause, the cost is ultimately going to
be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies
but also industrial employment in Krenland if our government took measures to reduce
cheap steel imports.
Which of the following, if true, most seriously weakens the editorial’s argument?
A. Because steel from Krenland is rarely competitive in international markets, only a
very small portion of Krenlandian steelmakers’ revenue comes from exports.
B. The international treaties that some governments are violating by giving subsidies
to steelmakers do not specify any penalties for such violations.
C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs.
D. Because of advances in order-taking, shipping, and inventory systems, the cost of
shipping steel from foreign producers to Krenland has fallen considerably in
recent years.
E. Wages paid to workers in the steel industry in Krenland differ significantly from
wages paid to workers in many of the countries that export steel to Krenland.

Last edited by Zarrolou on 24 Jul 2013, 14:22, edited 1 time in total.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 10:20
I think it's C or D. What's the OA?

Explanation:

A) This answer is about exports which has nothing to do with weakening the argument.
B) Again, this is irrelavent to weakening the argument. It has no connection to the assumption that employees in steel compan will benefit, and industrial employment in general by taking measures to reduce steel imports.
C) If the steel cost is a significant part of the manufacturer's costs, then limiting the amount of cheap steel will not benefit those employed in the industrial sector. It would keep their costs high and still hurt the amount of money available to hire employees. (I might be overthinking this too).
D) This seems to give evidence of why the imports are cheaper and contradicts the statement that the reason is due to illegal subsidies by foreign governments.
E) This weakens it, but I don't think it satisfies "most weaken the above statement".

I guess in the end, I go with D.

saravalli wrote:
Editorial in Krenlandian Newspaper:
Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in
many cases because foreign governments subsidize their steel industries in ways that are
banned by international treaties. But whatever the cause, the cost is ultimately going to
be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies
but also industrial employment in Krenland if our government took measures to reduce
cheap steel imports.
Which of the following, if true, most seriously weakens the editorial’s argument?
A. Because steel from Krenland is rarely competitive in international markets, only a
very small portion of Krenlandian steelmakers’ revenue comes from exports.
B. The international treaties that some governments are violating by giving subsidies
to steelmakers do not specify any penalties for such violations.
C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs.
D. Because of advances in order-taking, shipping, and inventory systems, the cost of
shipping steel from foreign producers to Krenland has fallen considerably in
recent years.
E. Wages paid to workers in the steel industry in Krenland differ significantly from
wages paid to workers in many of the countries that export steel to Krenland.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 10:53
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C

with the current situation, only the domestic steel industry is harmed. But if restrict steel import, everybody will be harmed. Other manufacturing industries will not be competitive, and they will go bankrupt, therefore no more customers for the domestic steel makers.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 11:07
On second thought...D is not correct. It strengthens, not weakens. The stem says "Whatever the cause..." D gives yet another reason for why the steel prices are low. The author doesn't really care why the prices are low, the author is stating it will hurt workers and the industry.

C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs.

My thinking behind switching to this is similar to gmatnub's. If it's already a significant part of their raw material costs, restricting the cheaper steel import doesn't help them. It will increase their costs because the supply of steel is less. So the author is saying something needs to be done to help. This statement makes the solution offered by the author less viable, i.e., weakens it.

Thanks GMATNUB.
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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 11:14
I figured C, but because it showed another market for the steel internal to the country.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 11:19
Argument: Cheap imports are causing not only the job losses but also affecting the steel industries.

A. Because steel from Krenland is rarely competitive in international markets, only a
very small portion of Krenlandian steelmakers’ revenue comes from exports.[revenue – irrelevant – eliminate it]
B. The international treaties that some governments are violating by giving subsidies
to steelmakers do not specify any penalties for such violations. [penalty and violations – out of scope – eliminate it]
C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs. [Hold it]
D. Because of advances in order-taking, shipping, and inventory systems, the cost of
shipping steel from foreign producers to Krenland has fallen considerably in
recent years. [Strengthen the argument - eliminate it]
E. Wages paid to workers in the steel industry in Krenland differ significantly from
wages paid to workers in many of the countries that export steel to Krenland. [wages – out of scope – eliminate it]

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 11:22
saravalli wrote:
Editorial in Krenlandian Newspaper:
Krenland’s steelmakers are losing domestic sales because of lower-priced imports, in
many cases because foreign governments subsidize their steel industries in ways that are
banned by international treaties. But whatever the cause, the cost is ultimately going to
be jobs in Krenland’s steel industry. Therefore, it would protect not only steel companies
but also industrial employment in Krenland if our government took measures to reduce
cheap steel imports.
Which of the following, if true, most seriously weakens the editorial’s argument?
A. Because steel from Krenland is rarely competitive in international markets, only a
very small portion of Krenlandian steelmakers’ revenue comes from exports.
B. The international treaties that some governments are violating by giving subsidies
to steelmakers do not specify any penalties for such violations.
C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs.
D. Because of advances in order-taking, shipping, and inventory systems, the cost of
shipping steel from foreign producers to Krenland has fallen considerably in
recent years.
E. Wages paid to workers in the steel industry in Krenland differ significantly from
wages paid to workers in many of the countries that export steel to Krenland.

D can't be right.

The steel could be cheap because of any reason (either the shipping costs or the policies of foreign countries), but it's the cost of the import that might cause the loss of labour. So, D can't weaken the argument.

C sounds the like the right choice. If the significant portion of the total manufacturing cost is steel, it makes sense to keep importing the steel. If the government stops the low priced imports, it will decrease the profit (may even cause loss) and hence will ultimately lead to job loss.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 12:15
i get A..

basically A says that look we are not exporting anything..so most domestic production is consumed domestically..so leads one to think if imports are really impacting the steel industry..

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 12:39
Can you explain why the others are wrong? This passage sees a connection between the import of low cost steel and its effects on the workers and industry. If the steel is not competitive in the international markets, you're right it won't get sold internationally. But this ignores the claim that importing steel is harming the markets. In order to weaken an argument, we must figure out what the argument is, find assumptions or facts that support the conclusion of the argument, and then select an answer choice that refuts those facts or undercuts the assumption supporting the argument in the stem.

Here, the argument is that cheap imports hurt domestic steel because domestic steel can't compete with the import prices. Solution is the protect the steel industry, possibly with something like an import tarriff on steel. The assumption is that without the cheap steel, everyone will be fine. We need to find something that undercuts that premise.

C does just that. If the current cost of steel is already a large part of the raw materials cost for manufacturers, if you elminate the cheaper steel, or raise the price by tarriff, that hurts the manufacturers because they are less profitable, which results in harming the employees.

fresinha12 wrote:
i get A..

basically A says that look we are not exporting anything..so most domestic production is consumed domestically..so leads one to think if imports are really impacting the steel industry..

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 18:21
sanjay_gmat wrote:
D can't be right.

I think D should be OA!

Even though you reduce imports, you still not protect the industry and its employment!
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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 20:15
sondenso wrote:
sanjay_gmat wrote:
D can't be right.

I think D should be OA!

Even though you reduce imports, you still not protect the industry and its employment!

I think the least we can do is speculate the OA

Also, I didn't get you. Why exactly you think D is right?

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 20:36
C is the most appropriate since the statement weakens the argument that they are losing on domestic sales due to lower priced imports - A, B and E are irrelevant.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 20:50
I think is C.
Krenland's industry will be hurt more than it can benefit if C is true, thus weaken's the argument.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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22 May 2008, 20:55
C or D?

C. Steel is the most important ingredient for the manufacturers who are facing sever competition.

D. It does undermines the editorial a tad but it is weak in comparison to D. I think 'recent years' is the key here.
C.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing [#permalink]

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23 May 2008, 11:24
Great discussion. OA is C. Thanks

reducing cheap steel imports(cause) --- > protects steel companies & employment in Krenland. (Effect)

To weaken either find a different cause or find opposite effect.
C is saying for the same cause there is an opposite effect.

C. For many Krenlandian manufacturers who face severe international competition
in both domestic and export markets, steel constitutes a significant part of their
raw material costs. ( Now if govt reduces steel imports, these manufacturers cannot keep up with 'severe international competition'. So this will hurt them.) (opposite effect).

D.Because of advances in order-taking, shipping, and inventory systems, the cost of
shipping steel from foreign producers to Krenland has fallen considerably in
recent years.(So now foreign steel is cheaper. This means it will hurt manufacturers. If govt reduces imports , it will not hurt manufacturers. Implies,
reducing cheap steel imports --- > protects steel companies & employment in Krenland.
So D is strengthens.

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Re: Editorial in Krenlandian Newspaper: Krenland’s steelmakers are losing   [#permalink] 23 May 2008, 11:24

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