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Pre-thinking:

The analyses of the argument can be thus conducted.

The historian draws a conclusion about the existence of timber trade between two ancient countries basis the fact that a law regulating that trade was enacted by one of the countries. The critic considers this a flawed conclusion since laws once enacted to regulate an ongoing activity can remain on the statute books even after that activity has ceased.

The critic's objection itself appears flawed because it does not address the basis of the historian's conclusion. The historian's conclusion is not based on the fact that a law regulating timber trade existed on the books of Nayal, but that such a law was enacted. This is relevant because while laws may remain on the books even after its target activity has ceased, it is less likely that a law targeting an activity would be enacted for an activity that does not take place at all.

Basis this understanding, let us examine the options:

A) produces evidence that is consistent with there not having been any timber trade between Poran and Nayal during the third Nayalese dynasty. Incorrect. If the critic's objection to the historian had indeed produced such evidence, it would make the critic's response valid and not flawed, since the critic's claim is opposed to that of the historian's claim that timber trade did indeed exist between the two nations.

B) cites current laws without indicating whether the laws cited are relevant to the timber trade. Incorrect. The critic does not cite any current laws but only states that currently there do exist laws regulating activities which are no longer carried out.

C) fails to recognize that the historian's conclusion was based on indirect evidence rather than direct evidence. Incorrect. A conclusion based on indirect evidence need not necessarily be incorrect. Failure to recognize this distinction does not necessarily make an objection flawed.

D) takes no account of the difference between a law's enactment at a particular time and a law's existence as part of a legal code at a particular time. Correct. Consistent with our pre-thinking above.

E) accepts without question the assumption about the purpose of laws that underlies the historian's argument. Incorrect. That the critic considers the historian's argument to be flawed means that he/she does not accept without question the purpose of the laws.

Hope this helps.
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When I read the argument I thought that one flaw might be that this Critic's argument is based on the assumption that this today's statute books scenerio is true for the past trades between the ancient nations also.

Keeping this in mind let's read the options:

A) produces evidence that is consistent with there not having been any timber trade between Poran and Nayal during the third Nayalese dynasty. [No such evidence was produced]
B) cites current laws without indicating whether the laws cited are relevant to the timber trade. [No! It should be "Cites current patterns in practice without indicating whether the laws cited are relevant to the past trade."]
C) fails to recognize that the historian's conclusion was based on indirect evidence rather than direct evidence. [Nope]
D) takes no account of the difference between a law's enactment at a particular time and a law's existence as part of a legal code at a particular time. [yes! This was the assumption]
E) accepts without question the assumption about the purpose of laws that underlies the historian's argument.[ No it's the opposite! he doesn't accept the assumption of the historian arguments]
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Historian: There is no direct evidence that timber was traded between the ancient nations of Poran and Nayal, but the fact that a law setting tariffs on timber imports from Poran was enacted during the third Nayalese dynasty does suggest that during that period a timber trade was conducted.

Critic: Your reasoning is flawed. During its third dynasty, Nayal may well have imported timber from Poran, but certainly on today's statute books there remain many laws regulating activities that were once common but in which people no longer engage.

The critic's response to the historian is flawed because it

A) produces evidence that is consistent with there not having been any timber trade between Poran and Nayal during the third Nayalese dynasty. - WRONG. Not consistent at all. This choice in itself is flawed.
B) cites current laws without indicating whether the laws cited are relevant to the timber trade. - WRONG. 2nd best choice for me. Relevancy is there but again this is not the flaw critic makes.
C) fails to recognize that the historian's conclusion was based on indirect evidence rather than direct evidence. - WRONG. May have failed but based on what this choice claims is not at all there in Historian's argument.
D) takes no account of the difference between a law's enactment at a particular time and a law's existence as part of a legal code at a particular time. - CORRECT. This is right since present laws does not justify past laws or activities.
E) accepts without question the assumption about the purpose of laws that underlies the historian's argument.. - WRONG. The word "flawed" suggests that critic did raise question.

Answer D.
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