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If there is an oil-supply disruption resulting in higher international

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If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post Updated on: 23 Dec 2018, 06:44
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A
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C
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Project CR Butler:Day 48:Critical Reasoning (CR2)


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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

Which of the following conclusions is best supported by the statement above?

(A) Domestic producers of oil in open-market countries are excluded from the international oil market when there is a disruption in the international oil supply.

(B) International oil-supply disruptions have little, if any, effect on the price of domestic oil as long as an open-market country has domestic supplies capable of meeting domestic demand.

(C) The oil market in an open-market country is actually part of the international oil market, even if most of that country’s domestic oil is usually sold to consumers within its borders.

(D) Open-market countries that export little or none of their oil can maintain stable domestic oil prices even when international oil prices rise sharply.

(E) If international oil prices rise, domestic distributors of oil in open-market countries will begin to import more oil than they export.


Same passage with other question: LINK

Originally posted by ananthpatri on 30 Aug 2012, 23:52.
Last edited by gmat1393 on 23 Dec 2018, 06:44, edited 2 times in total.
Renamed the topic and edited the question.
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 31 Aug 2012, 01:52
The answer would be C
As we are looking for a conclusion.If the domestic oil market in some way is actually a part of the international market then the price of the domestic oil would be directly dependent on that of the international oil market price(independent at how the domestic production of oil is consumed). Therefore any increase in the international oil price would result in the same increase in the domestic oil price.
Let me know if you have any doubt in particular option.
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 31 Aug 2012, 03:52
For ‘find a conclusion’ based questions, the correct conclusion can only be supported by the facts stated in the question, not other assumptions (no matter how obvious) can be added.
Therefore-
a) The argument makes no mention of whether or not countries are excluded from the international market. Eliminate.
b) This is exactly the opposite of what the argument is saying. Be careful, because all the elements of the conclusion are mentioned in the argument which makes it attractive, but the argument actually opposes the conclusion. Eliminate
c) Correct, the argument accounts for the effect that international oil fluctations have on domestic prices, and accounts for the fact that domestic oil is sold domestically.
d) Again, this conclusion contradict what the argument is saying. Eliminate
e) This conclusion references behaviours (importing) that is not present in the argument.

What is the source for this question? I think GMAT type questions tend to conform to the ‘absolutely no assumptions allowed’ rule a bit more than this one did.
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 31 Aug 2012, 14:57
bradfris wrote:
For ‘find a conclusion’ based questions, the correct conclusion can only be supported by the facts stated in the question, not other assumptions (no matter how obvious) can be added.
Therefore-
a) The argument makes no mention of whether or not countries are excluded from the international market. Eliminate.
b) This is exactly the opposite of what the argument is saying. Be careful, because all the elements of the conclusion are mentioned in the argument which makes it attractive, but the argument actually opposes the conclusion. Eliminate
c) Correct, the argument accounts for the effect that international oil fluctations have on domestic prices, and accounts for the fact that domestic oil is sold domestically.
d) Again, this conclusion contradict what the argument is saying. Eliminate
e) This conclusion references behaviours (importing) that is not present in the argument.

What is the source for this question? I think GMAT type questions tend to conform to the ‘absolutely no assumptions allowed’ rule a bit more than this one did.


I second Brad's analysis. The other four choices are fairly easily eliminated, but (C) requires either an assumption (that there's no other reason for why the prices track each other) or outside knowledge (of how market's work – seems like it would be pretty reasonable outside knowledge for the GMAT to expect, but the GMAT really is strict about the "no outside knowledge" rule in CR).
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 28 Mar 2018, 21:27
ananthpatri wrote:
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

Which of the following conclusions is best supported by the statement above?

(A) Domestic producers of oil in open-market countries are excluded from the international oil market when there is a disruption in the international oil supply.

(B) International oil-supply disruptions have little, if any, effect on the price of domestic oil as long as an open-market country has domestic supplies capable of meeting domestic demand.

(C) The oil market in an open-market country is actually part of the international oil market, even if most of that country’s domestic oil is usually sold to consumers within its borders.

(D) Open-market countries that export little or none of their oil can maintain stable domestic oil prices even when international oil prices rise sharply.

(E) If international oil prices rise, domestic distributors of oil in open-market countries will begin to import more oil than they export.

Same passage with other question: LINK


(A) Domestic producers of oil in open-market countries are excluded from the international oil market when there is a disruption in the international oil supply.

(B) International oil-supply disruptions have little, if any, effect on the price of domestic oil as long as an open-market country has domestic supplies capable of meeting domestic demand.

(C) The oil market in an open-market country is actually part of the international oil market, even if most of that country’s domestic oil is usually sold to consumers within its borders.


(D) Open-market countries that export little or none of their oil can maintain stable domestic oil prices even when international oil prices rise sharply.

(E) If international oil prices rise, domestic distributors of oil in open-market countries will begin to import more oil than they export.

(C) is the correct choice
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 12 May 2018, 05:50
Hello GMATNinja,

Though option C is the best supported, please clarify my doubt here..

Stimulus says "domestic oil prices in an open market country can rise whether such countries import all or NONE of their oil"

Now consider a country X that DOES NOT import any oil and works solely on domestic oil. Even though price fluctuations for oil take place in this country because of international oil price changes, how can the oil in country X be PART of the international oil market?
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Re: If there is an oil-supply disruption resulting in higher international  [#permalink]

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New post 12 May 2018, 09:17
RMD007 wrote:
Hello GMATNinja,

Though option C is the best supported, please clarify my doubt here..

Stimulus says "domestic oil prices in an open market country can rise whether such countries import all or NONE of their oil"

Now consider a country X that DOES NOT import any oil and works solely on domestic oil. Even though price fluctuations for oil take place in this country because of international oil price changes, how can the oil in country X be PART of the international oil market?

Can anybody confirm the source of this question? There is a similar question in the 2015 Verbal Review, so I want to make sure that this one is actually an official guide question and not just based on an official question.

RMD007, "even if most of that country’s domestic oil is usually sold to consumers within its borders," that still allows for the fact that the country sells some oil on the international market, especially when international prices soar. That would make them part of the international oil market.

In other words, if international prices were to soar while domestic prices remained the same, country X might increase exports. But if international prices were to soar and domestic prices were to increase as well, country X might not increase exports. Both of those scenarios assume that country X is part of the international market.

If country X were NOT part of the international market, soaring international prices would have no impact on the domestic market. But if country X is part of the international market, then domestic prices will rise as international prices rise; otherwise, it wouldn't make sense to sell the oil domestically.
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Re: If there is an oil-supply disruption resulting in higher international &nbs [#permalink] 12 May 2018, 09:17
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