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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, and health care costs to the government have risen correspondingly. The health secretary recently proposed a series of laws aimed at halting tobacco use in Gandania. Fully ten percent of the annual revenues Gandania receives come from tobacco sales, however, so Gandania cannot afford to institute the proposed laws.

Which of the following is an assumption on which the argument depends?

The argument says Gandania cannot afford to halt tobacco use because tobacco sales provide ten percent of government revenue. The missing assumption is that the lost tobacco revenue would not be offset by savings from lower smoking-related health care costs.

A. If the health secretary’s proposal is not implemented, the health secretary will be obliged in the near future either to resign or to present an alternative proposal.

This is irrelevant. The argument is about whether Gandania can afford the laws, not what the health secretary would do next.

B. If smoking is halted in Gandania, Gandania’s smoking-related health care costs will not soon decrease enough to offset the projected loss of revenue from tobacco sales.

This is correct. If health care costs dropped enough to offset the lost tobacco revenue, then Gandania might be able to afford the laws. So the argument depends on assuming that this offset will not happen.

C. The proposed laws are not likely to cause a significant decrease in the amount of tobacco Gandania exports.

This is not required. The argument concerns tobacco use in Gandania and government revenue from tobacco sales, not exports.

D. The percentage of revenue Gandania receives from tobacco sales has remained relatively stable in recent years.

This is not required. The argument relies on the current ten percent figure, not on whether that percentage has been stable.

E. In Gandania, government revenue from tobacco sales far surpasses that from any other source.

This is too strong. Tobacco revenue does not need to be the largest source of revenue; the argument needs only that losing it would not be financially offset.

Answer: (B)
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Marty, I got the answer right, but I cannot understand your explanation.
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The key gap in this argument to notice is the following:

The evidence is about "annual revenues."

The conclusion is about what Gandania can "afford."

So, the correct answer will state something that must be true for the evidence about revenues to support a conclusion about what the government can afford.
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Hi durant25,

You got the answer, so let me just translate what Marty is pointing at, because it's a single clean idea hiding behind two words.

Marty is highlighting that the argument quietly switches terms:

- The evidence talks about "annual revenues" - money coming in. Losing tobacco sales means losing 10% of that income.
- The conclusion talks about what Gandania can "afford" - and "afford" is about the net picture, money in minus money out.

Those are not the same thing. You can lose some income and still be just as able to afford something - if your costs drop at the same time.

And that's exactly the situation here. The very first sentence says smoking is driving health care costs up. The proposed laws halt smoking, so they would push those health costs back down. So the laws cost revenue but also save spending.

For "cannot afford" to follow from "loses 10% of revenue," the argument has to assume the cost savings won't make up for the lost revenue. That's precisely what B locks down: the health-cost savings "will not soon decrease enough to offset the projected loss of revenue." Without that assumption, the savings could cover the gap and Gandania could afford the laws.

A quick everyday version to make it click:

"I can't afford to quit my weekend job - it's 10% of my income."

Sounds fine, until you notice the weekend job is also what forces you to pay for childcare and gas. Quitting loses income, but it also kills those costs. So whether you can "afford" to quit depends on the net - the same revenue-vs-cost gap Marty is flagging.

That's the whole move: revenue going down doesn't automatically mean you can no longer afford something, because costs can go down too.

Answer: B

durant25
Marty, I got the answer right, but I cannot understand your explanation.

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