In Gandania, where the government has a monopoly on tobacco sales, the

Question

In Gandania, where the government has a monopoly on tobacco sales, the incidence of smoking-related health problems has risen steadily for the last twenty years. The health secretary recently proposed a series of laws aimed at curtailing tobacco use in Gandania. Profits from tobacco sales, however, account for ten percent of Gandania's annual revenues. Therefore, Gandania cannot afford to institute the proposed laws.

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

(A) All health care in Gandania is government-funded.

(B) Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports.

(C) The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years.

(D) Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.

(E) No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use.

ID 00737

pqhai · Accepted Answer

Hi KalEl. I'm glad to help.

This question is tough. OA is A.

ANALYZE THE STIMULUS:

Fact:  In Gandania, the government has a monopoly on tobacco sales,
 Fact:  However, Profits from tobacco sales account for 10% of Gandania's annual revenues. 
 Conclusion:  Gandania cannot afford to institute the proposed laws.

The KEY of this question is the formula:   GOV NET INCOME = GOV REVENUE - GOV EXPENSES.

The author says sales from tobacco account 10% of Government Revenue ==> He concludes that if the proposed laws are instituted ==> Gov Revenues decrease ==> Net Income will decrease ==> Government CAN NOT afford to institute these laws.

The assumption is: Government  expenses will not decrease or stay the same  after the proposed laws are instituted.

What if:  The new laws make Government Revenue decrease, say 10%, but  they also make Government Expenses decrease, say greater than 10%  ==> Government Net Income will increase. That's the KEY.

ANALYZE EACH ANSWER: 
 
A) All health care in gandania is government-funded.
  Correct.   Even the new laws make government revenues decrease, but what if they  also make government expenses DECREASE too  (because the government  CAN DECREASE its expenses for health care  regarding tobacco issues.) ==> Government Net income may not decrease or even increase.

B) Implementing the proposed laws is not likely to cause significant increase in the amount of tobacco gandania exports.
 Wrong.   Total sales = Domestic sales + Exports  ==> New laws make both domestic sales and export decrease ==> Government total revenue will decrease for sure.

C) The percentage of revenue gandania recieves from tobaco sales has remained steady in recent years.
 Wrong.  Does not affect at all.  "remain steady in recent years" does not mean "remain forever" .

D) profits from tobaco sales far surpass any other single source of revenue for the gandandian government.
 Wrong.  If profits from tobacco sales are much greater than any other source ==>  their decline will make a big shortfall  of government revenue in the future.

E) No government official in gandania has ever previously proposed laws aimed at curtailing tobacco use.
 Wrong.   Out of scope for sure.

TAKEAWAY:  
In real GMAT, when you see questions regarding Profit, Expenses, Revenue, Costs.....
* If the questions have  ONLY  profit/revenues ==> Make conclusion ==> Think about the opposite side: Costs/Expenses
* If the questions have  ONLY  Costs/Expenses ==> Make conclusion ==> Think about the opposite side: Revenue/Profit.

Hope it helps

KarishmaB · Answer

Responding to a pm:

Question Type: Weaken

We should try to weaken the conclusion.

Conclusion: Gandania cannot afford to institute the proposed laws.
Notice the author believes that Gandania cannot AFFORD to institute these laws i.e. the country will suffer financially if these laws are brought in (since tobacco accounts for 10% of the revenue). To weaken the conclusion, we need to bring in some reason because of which the country may not suffer financially even if these laws are brought into effect. 
Also notice that the laws aimed at curtailing tobacco use IN Gandania, not in other countries. In the prethinking phase, all I could think of was perhaps the laws encourage export or something - very unethical but we don't need to comment on morals, just the financial aspect (anyway, it wasn't there in the options so no dilemma)

A) All health care in gandania is government-funded.
This option weakens our conclusion. If all health care in govt funded, the cost of health care would be increasing for the govt with tobacco use. If this law is brought into effect, the decrease in smoking could reduce the money spent in health care and hence the govt's finances could essentially stay the same even after the law is brought into effect. Hence, this weakens our conclusion that the govt cannot afford to institute the law. Answer (A)

B) Implementing the proposed laws is not likely to cause significant increase in the amount of tobacco gandania exports.
This option tells us that exports will not increase hence the govt will suffer financially. It strengthens the given conclusion instead of weakening it.

C) The percentage of revenue gandania recieves from tobaco sales has remained steady in recent years.
Out of scope

D) profits from tobaco sales far surpass any other single source of revenue for the gandandian government.
Strengthens the conclusion instead of weakening it.

E) No government official in gandania has ever previously proposed laws aimed at curtailing tobacco use.
Out of scope

brufarber · Answer

By spending less on health care, the gov. will cut an important source of debt in the LR. Therefore, A would weaken the argument.

lgon · Answer

Only A & B are in contention. But it does not specify if what percentage of the tobacco..does the govt exports.. if it exports all, then, it also weakens. But again..A is far more stronger choice for B to let in.

I will go for A, what is OA.. ?

icandy · Answer

can't be D.

Conclusion is G cannot afford to institute the proposed laws that curtail the use of tobacco.

We need some thing that says G can afford to or have to afford.

Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government, but still those profits make up only 10% of the revenues and the remaining 90% is untouched. Also it does not say how much will profits go down by to make such decision.

But with A, all HC funded by govt, govt can eliminate health costs and improve public health at the expense of profits from tobacco.

hence A

grumpyoldman · Answer

Where do these questions with the strange OA's come from? icandy is correct: B (if it is relevant at all) would strengthen the argument, not weaken it. The correct answer is A.

As for D, the fact that profits from tobacco are the single greatest source of revenue tells us nothing at all about how much those profits would decline because of the laws, nor about how much could or could not be replaced by other revenue sources.

If anything, D might weaken the argument by showing that the WORST possible outcome would be to lose a maximum of 10% of revenues.

Rock750 · Answer

Hence, only A weakens properly the argument

KalEl · Answer

Still don't understand why A is right?

Arguement: Profits from Tobacco = 10% of Gandania'a Revenue. So they should not implement this law.

A. All health care in Gandania is government-funded. <-- How does this come into picture? Isn't this Out of scope?

We can arrive at this by eliminating all other options but how is this justified?

mit2591 · Answer

For me also A - more smoker == more patients == more gov spending

energetics · Answer

Premise:  
1. healths problems from smoking up
2. proposed law = tobacco use down
3. tobacco profits = 10% of revenue
 Conclusion:  
weaken --> proposed law is not economically feasible

(A) All health care in Gandania is government-funded.   
-- I actually marked it off but came back after the other ones were even worse... the justification is that they can afford to absorb the decrease in revenue from tobacco sales if they increase the costs of medical treatment.
 (B) Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports.  
-- if the modifier "not" wasn't present this would be a great answer. But, since their exports won't increase, they can't make up the monetary deficit from curtailing tobacco use. This strengthens the conclusion.
 (C) The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years.  
-- irrelevant, doesn't help us determine if they can implement the law or not 
 (D) Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.  
-- irrelevant, we aren't concerned with comparing the 10% profits 
 (E) No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use. 
-- irrelevant, the history of legislation doesn't matter

ajaygaur319 · Answer

The whole argument is a  quant based argument . In the argument, the author is trying to say that the revenue of the country will decrease by curtailing the use of tobacco products. If we need to weaken the argument we need to find an option where there is some other source of revenue for the government.

(A) All health care in Gandania is government-funded. -  After people have reduced their tobacco usage then they can become more health conscious and might seek for health institutes for their problems. If all health care in Gandania are government funded, they will generate revenue. We can keep this option and check other options 
(B) Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports. -  Even if the exports remain same, there is no way to increase the revenue for Gandania government. 
(C) The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years. -  This option seems irrelevant to the argument or strengthen the fact that government will lose revenues 
(D) Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government. -  By knowing the profits, we cannot know the effect in revenues unless we know the cost price as well. The government can increase the costs or might as well decrease them, we don't know. 
(E) No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use. -  We don't care about this

(A)  should be the answer.

sssanskaar · Answer

This is such a beautiful question from GMAC !!

CEdward · Answer

Grr. I duped myself out of the correct answer by coming up with two justifications for a

(A) All health care in Gandania is government-funded.

Why I didn't select this choice: One might argue that the conclusion is justified since Gandania would need the 10% of Gandania’s annual revenues that come from the profits from tobacco sales. In other words, they can’t afford to institute the laws given this constraint. This choice is out because it certainly doesn’t weaken, and perhaps might even strengthens the argument.

Why I should have selected this choice: This goes beyond the passage and is something that one should avoid, but the economic impact from disease burden can actually end up costing the government more than whatever they can gain from tobacco sales.

(B) Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports.

Well, if it doesn’t cause a significant increase in exports, then that means the proposed law would reduce the amount of revenue received. Isn’t that what we are trying to weaken?

(C) The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years.

OK. That’s nice to know. This doesn’t however weaken the argument that Gandania cannot afford to institute the laws. It might even give us reason to think that if the laws are implemented that this trend of steady tobacco sales would break and hence the government would lose revenue – the very reason why the government can’t afford to institute the laws.

(D) Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.
This actually strengthens the argument. Now we know that not only are the profits from tobacco sales 10% of the total revenue but also that they are the largest source of such profits so if they lose out on this then it’s a problem for the government. One might be tempted to conclude here that since it’s the largest source of revenue that Gandania can in fact afford to institute the proposed laws. But, we don’t actually have any numerical information to support that here.

(E) No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use.

This is tangential to the argument. Would we be any worse off if we didn’t know this? No.

VeritasKarishma  What do you think about the contradictory justifications in option A that I proposed? I was stuck on this for a half hour trying to find a sign of weakness.

KarishmaB · Answer

What you said would make sense had the argument said "the incidence of health problems has risen steadily for the last twenty years."
But what the argument actually says is "the incidence of smoking-related health problems has risen steadily for the last twenty years."
So we know that smoking is causing health problems. 
Option (A) says that doctor's bills are paid by the Govt. So if smoking reduces, the incoming revenue may reduce but the incoming bills will reduce too. Hence cost to the govt will go down too. Then the govt may be able to afford passing the law.

btsaami · Answer

Conclusion:  Gandania cannot afford to institute the proposed laws for curtailing tobacco usage.
 Premise: Profits from tobacco sales, however, account for ten percent of Gandania's annual revenues
 Assumption:  Loss of govt. revenue from smoking related health problem will not be more than 10% annual revenue from sales of tobacco.
 Prethinking:  Option which attacks the above assumption. Smoking related health is a financial burden to govt. revenue.
 Why correct? (A) All health care in Gandania is government funded. --> Healthcare is govt. funded. Increase in smoking related health issues --> more patients seeking health care --> cost is born by the govt, hence revenue loss --> This revenue loss can offset the revenue generation by sales of tobacco.
 Why wrong? (B) Implementing the proposed laws is not likely to cause a significant increase in the amount of tobacco Gandania exports. --> Argument is about tobacco sales and it's impact on health and economy and not about where it comes from
(C) The percentage of revenue Gandania receives from tobacco sales has remained steady in recent years. --> just an extension of premise with no information whether this is higher than the total cost of healthcare.
(D) Profits from tobacco sales far surpass any other single source of revenue for the Gandanian government.--> Classic trap of comparison with other subsets with not affect on the argument.

(E) No government official in Gandania has ever previously proposed laws aimed at curtailing tobacco use.--> This can be a supporter instead if the consumption laws were not proposed because of higher revenue of tobacco sales. Can also be out of scope as what other have proposed in the past has no visible link to this particular law.

In Gandania, where the government has a monopoly on tobacco sales, the

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