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

It is currently 13 Oct 2019, 16:57

Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

If the statement in the passage concerning oil-supply disruptions is

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
Senior Manager
Senior Manager
User avatar
Joined: 19 Oct 2004
Posts: 282
Location: Missouri, USA
If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post Updated on: 28 Jan 2019, 00:17
3
30
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

72% (01:44) correct 28% (01:53) wrong based on 1636 sessions

HideShow timer Statistics

If there is an oil-supply disruption resulting in higher international oil prices, domestic oil prices in open-market countries such as the United States will rise as well, whether such countries import all or none of their oil.

If the statement in the passage concerning oil-supply disruptions is true, which of the following policies in an open-market nation is most likely to reduce the long-term economic impact on that nation of sharp and unexpected increases in international oil prices?


(A) Maintaining the quantity of oil imported at constant yearly levels

(B) Increasing the number of oil tankers in its fleet

(C) Suspending diplomatic relations with major oil-producing nations

(D) Decreasing oil consumption through conservation

(E) Decreasing domestic production of oil


Project CR Butler:Day 48:Critical Reasoning (CR1)


For all CR butler Questions Click Here


Official Guide for GMAT Verbal Review, 2nd Edition

Practice Question
Question No.: 58
Page: 140
Difficulty:


Same passage with other question: LINK

_________________
Let's get it right!!!!

Originally posted by ruhi on 01 Nov 2004, 13:27.
Last edited by Bunuel on 28 Jan 2019, 00:17, edited 6 times in total.
Renamed the topic and edited the question.
Most Helpful Community Reply
SVP
SVP
avatar
Joined: 30 Oct 2003
Posts: 1516
Location: NewJersey USA
Re: If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post 01 Nov 2004, 14:31
13
7
Open market(As I understand it) : A market where the seller is free to set any price and the price is not subject to government regulations. Also anyone can sell in that market.

With this definition I proceed to answer your question.

If there is sharp increase in the price of oil in the international
market then what happens in the different countries ?

1) Countries which import oil - They will be affected because they will now
pay higher price.

2) Countries which import no oil at all - Means they either have oil
sufficient to cater to local market and may have extra oil to export.
Here if the international prices rise then local producers might export
oil to earn bigger profits and local consumer will suffer. In fact
oil prices will rise here also because there is less oil available for
consumption.

So whether or not a country imports oil that country will suffer if the
international prices rise.

The best way to counter this problem is decrease consumption through
conservation.

If oil consummption is decreased then countries which import oil will
suffer less and also those countries which import no oil will not suffer
more.

I hope my explanation matches with OA and is acceptable.
General Discussion
Director
Director
User avatar
Joined: 16 Jun 2004
Posts: 783
Re: If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post 02 Nov 2004, 01:53
1
1
D for me.

Two issues - Oil Prices and Oil distribution.

Open market policy dictates pricing depending on Oil availability/supply/disruption / such situtations. No one can do anything about it.

High oil prices and uncertain supplies are a typical problem not only for the United States, but also for the world economy. What's the best way to control it? Yep - Can be controlled by conservation.

Quick note on Open market oil policy (leisure read)
Oil prices are determined by the trading of 1,000-barrel contracts of West Texas Intermediate oil in an open market bid system on the New York Mercantile Exchange. Worldwide prices are adjusted from this price for oil quality and distance from markets. Oil producers, mostly governments, sell their oil into this world market system and refiners buy from it for oil to refine into products for their customers. The ownership of a particular barrel of oil may change several times between production and refining. This is a worldwide, largely open market; oil companies have little or no influence on these prices and participate in the trading market on the same basis as any other trader or investor.
VP
VP
User avatar
Joined: 14 May 2006
Posts: 1061
Re: If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post 24 Jul 2006, 09:49
1
I believe this is OG question...

I think it is b/w D and E... I choose D because we don't know that US produces oil, according to this argument

(A) out of scope
(B) oil tankers w/out oil make no sense :lol:
(C) and what will be achieved by doing so?
Verbal Forum Moderator
User avatar
V
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2401
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
GMAT ToolKit User Reviews Badge CAT Tests
Re: If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post 19 Dec 2016, 20:19
If there is an oil-supply disruption resulting in higher international oil prices, domestic oil prices in open-market countries such as the United States will rise as well, whether such countries import all or none of their oil.

If the statement in the passage concerning oil-supply disruptions is true, which of the following policies in an open-market nation is most likely to reduce the long-term economic impact on that nation of sharp and unexpected increases in international oil prices?

Pre-thinking-
In an open market, the domestic oil producers will try to export their in order to maximize their profits . So the government can
- Reduce the oil consumption by encouraging usage of alternative energy
- Impose sanctions/taxes against export of domestic oil - This may not be a viable option in an open market

A. Maintaining the quantity of oil imported at constant yearly levels - This will not help and domestic market will still be susceptible to fluctuations in international crude price

B. Increasing the number of oil tankers in its fleet - It does not help

C. Suspending diplomatic relations with major oil-producing nations - It does not help

D. Decreasing oil consumption through conservation - Correct - decreasing consumption or moving towards alternative energy

E. Decreasing domestic production of oil - It means the country has to import more oil if the domestic demand is at the same level

Answer D
_________________
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 5889
Re: If the statement in the passage concerning oil-supply disruptions is  [#permalink]

Show Tags

New post 08 Jul 2019, 01:21
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
GMAT Club Bot
Re: If the statement in the passage concerning oil-supply disruptions is   [#permalink] 08 Jul 2019, 01:21
Display posts from previous: Sort by

If the statement in the passage concerning oil-supply disruptions is

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne