The following passage is adapted from an article published in 1993. How severe should the punishment be for a corporate crime- e.g., a crime in which a corporation profits from knowingly and routinely selling harmful products to consumers? Some economists argue that the sole basis for determining the penalty should be the reckoning of cost and benefit: the penalty levied should exceed the profit that accrued to the corporation as a result of committing the crime. For example, if a corporation made a profit of $6 million from selling an unsafe product and the fine were, say, $7 million, these economists would feel that justice had been done. In arguing thus, the economists hold that the fact that a community may find some crimes more abhorrent than others or wish to send a message about the importance of some values-such as, say, not endangering citizens' health by selling tainted food should not be a factor in determining penalties. The law, the economists argue, should affect corporations'earnings rather than try to assess their morality. But this approach seems highly impractical if not impossible to follow. For the situation is complicated by the fact that an acceptable reckoning of cost and benefit needs to take into account estimated detection ratios-the estimated frequency at which those committing a given type of crime are caught. Courts must assume that not all corporate crimes are detected, and legal wisdom holds that penalties must be higher as detection ratios decrease. Otherwise, a corporation might calculate that since it has only, say, a 1-in-10 chance of being caught committing a crime, even if the potential penalty is somewhat larger than the profit to be gained from violating the law it may still ultimately be more profitable to repeatedly commit the crime. A true reckoning of cost and benefit would therefore have to take estimated detection ratios into account, but this means that, in the above scenario, if the profit resulting from a crime were $6 million, the penalty would have to be not $7 million but at least $60 million, according to the economists' definition, to be just. The economists' approach requires that detection ratios be high enough for courts to ignore them (50 percent or more), but recent studies suggest that ratios are in fact closer to 10 percent. Given this, the astronomical penalties necessary to satisfy the full reckoning of cost and benefit might arguably put convicted corporations out of business and throw thousands of people out of work. Thus, some other criterion in addition to the reckoning of cost and benefit-such as the assignment of moral weight to particular crimes- is necessary so that penalties for corporate crimes will be practical as well as just. 1 E 1)Which one of the following most accurately captures the main point of the passage? (A) Because not all corporate crimes are detected, courts must supplement the reckoning of cost and benefit by taking detection ratios into account when determining penalties for such crimes if the penalties are to be both practical and fair. (B) The reckoning of cost and benefit as the sole basis for determining penalties for corporate crimes would be an appropriate means of assessing such penalties if it took estimated detection ratios into account. (C) Because they argue that the reckoning of cost and benefit should be the sole basis for determining penalties for corporate crimes, economists do an injustice to communities that believe that the penalties must affect not only corporate earnings but corporate morality. (D) Because it does not take detection ratios into account, the reckoning of cost and benefit as the sole basis for determining penalties for corporate crimes results in penalties that are not high enough both to satisfy community moral standards and to send a message about the importance of preventing corporate crime. (E) Because the need to take detection ratios into account makes reckoning cost and benefit impractical as the sole basis for determining penalties for corporate crimes, another method of determining the penalties must be found to supplement such reckoning. 2 D 2) The primary purpose of the passage is to A) criticize courts for their leniency in punishing corporate crime (B) describe some of the reasons corporations engage in corporate crime (C) condemn corporations for failing to consider the moral implications of their actions (D) argue against some economists' view of how to penalize corporate crime (E) urge the implementation of a specific proposal for penalizing corporate crime 3 C 3) Suppose a corporation is convicted of a crime having a detection ratio of l-in-10. Based on the passage, the author would be most likely to endorse which one of the following penalties (A) a fine exactly equal to the corporation's profit from committing the crime (B) a fine slightly higher than the corporation's profit from committing the crime (C) a fine enough higher than the corporation's profit from committing the crime to demonstrate community opinion of the crime without putting the corporation out of business (D) a fine determined by taking the corporation's profit from committing the crime and raising it tenfold in order to reflect the detection ratio (E) a fine high enough to put the corporation out of business 4 E 4)The author ascribes which one of the following views to the economists discussed in the passage? (A community's moral judgment of certain corporate crimes is most reliable when the crime in question endangers the community as a whole. (B) A community's moral judgment of certain corporate crimes is only occasionally useful in determining penalties for such crimes. (C) A community's moral judgment of certain corporate crimes is often more severe than the penalties levied against such crimes. (D) A community's moral judgment of certain corporate crimes is irrelevant to assessing the morality of corporations that commit the crimes. (E) A community's moral judgment of certain corporate crimes is inappropriate in determining penalties for such crimes. 5 A 5)Which one of the following most accurately represents the organization of the passage? (A) A question is raised; one answer to the question is summarized; an important aspect of this answer is presented; a flaw in the answer is identified; the need for an alternative answer is affirmed. (B) A problem is posed; one solution to the problem is summarized; a view held by those who favor the solution is presented; a criticism of the solution is identified; the criticism is evaluated and rejected. (C) A view is summarized; the ethics of those who hold the view are discussed; a flaw in the ethics of those holding the view is identified and described in detail; the view is rejected; an alternative view is offered. (D) A question is raised; two answers to the question are identified and compared; an assumption underlying each answer is identified; the assumption of one answer is found to be incorrect and this answer is rejected. (E) A problem is posed; the consequences of failing to solve the problem are described; one solution to the problem is suggested; an objection to this solution is described; the proposed solution is rejected. 6 A 6) With which one of the following statements would the economists discussed in the passage be most likely to agree? (A) The possibility of a corporation's going out of business should not be a factor in determining the size of the penalty levied against the corporation for committing a crime. (B) The community's opinion of the moral offensiveness of a corporate crime should not be a factor in assigning a moral weight to that crime. (C) The moral offensiveness of a corporate crime should not be a factor in determining the penalty levied against the corporation unless it tends to increase the size of the penalty. (D) The likelihood of a corporation's recommitting a particular crime should be the main factor in determining the size of the penalty levied against the corporation for committing the crime. (E) The penalty levied against a corporation for a particular crime should increase in direct relation to the number of times the corporation has previously been convicted of the crime. Source: LSAT Official PrepTest 77 ( December 2015 ) Difficulty Level: 650

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How severe should the punishment be for a corporate crime- e.g., a cri

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Hi GMATNinja,

Thanks for your response.
While I was doing this question, (A) was a spot on for me as the correct one, however, struggle a bit to eliminate B and D. I wanted to check with you, is it fine to mark an option if we ~100% confident of that without eliminating remaining one or two options? This is specifically for tough questions like 75-95% Hard (700-800). Please let me know.

GMATNinja

Question 6

siddhantvarma

GMATNinja KarishmaB MartyMurray

Need help with understanding question 6. I initially picked (C) but during review I found out that nowhere in the passage it states that "unless it tends to increase the size of the penalty" so can eliminate it on those grounds. However, I'm unable to understand how (A) would be the correct answer.

(A) states that:

Quote:

The possibility of a corporation's going out of business should not be a factor in determining the size of the penalty levied against the corporation for committing a crime.

From where and how can we infer that the economist don't consider a cooporation going out of business to not be a factor in determining the size of penalty? We know they assumed a wrong detection ratio of something close to 50 which actually comes close to 10 so they underestimated the number of crimes detected with respect to committed. But based on just this, how can we say that they don't care about the corporate going out of business? Is this something we need to infer?

This is admittedly another tough question. (A) isn't very tempting at first glance, but remember, from the first paragraph, that those economists "argue that the sole basis for determining the penalty should be the reckoning of cost and benefit". If cost and benefit (i.e. profit) is the SOLE basis, then there shouldn't be any other factors, including the possibility that the corporation goes out of business.

Choice (A) isn't directly stated in the passage, but we can infer that it's the right answer based on what's in the first paragraph (and POE, of course).

I hope that helps!