In the United States, landowners are effectively insured

Question

In the United States, landowners are effectively insured against natural disasters because the government subsidizes all land repairs by providing emergency relief after natural disasters. This “subsidy” is a partial cause for the high percentage of houses built on disaster-prone lands because it gives owners no financial incentive to research whether the land on which they build their houses is secure against disaster, argues an actuary. If owners were more selective, then potential house sites would need to be safe before being developed.

The actuary's argument makes which of the following assumptions?

A) Natural disasters are most costly when they strike large houses built close together.

B) A large percentage of landowners own several different lands across states.

C) The most careful site selection tends to be by owners building the more expensive houses.

D) The difference in the relief amounts paid to owners by different states has no major effect on site selection.

E) Potential builders can know which lands are secure against disaster.

methevoid · Answer

Argument states that the government insures land against any natural disaster, so land owners don't take sufficient pains to build their homes on areas which are disaster free. and land owners do it because they know that if some disaster happens then government will pay for the insured land.

The author concludes that land owners thus do not take pains to research whether the land which they have bought is disaster prone or not?

This argument assumes that Landowners have sufficient understanding to know what kind of land is disaster prone and what is not.

Hence answer is E.

gurpreetsingh · Answer

I think the answer should be D. If you negate it, the conclusion is weakend.

How can E be true? the potential builders are not same as landowners.

tapsgmat · Answer

Primises 1 : The house owners are insured INDIRECTLY , How ? because after disaster govt give money.
Primises 2 : The govt help is responsible for lot of house in disaster area as it not give any incentive b4 , so that owner can determine which area is safe.

So the answer Clearly E, it assumes people can know which area are safe b4 they build . :idea:

1 Kudo If u Like :wink:

gurpreetsingh · Answer

How can E be true? the potential builders are not same as landowners.

thevenus · Answer

got it right at 2:36 mins

In the United States, landowners are effectively insured against natural disasters because the government subsidizes all land repairs by providing emergency relief after natural disasters. This “subsidy” is a partial cause for the high percentage of houses built on disaster-prone lands because it gives owners no financial incentive to research whether the land on which they build their houses is secure against disaster, argues an actuary. If owners were more selective, then potential house sites would need to be safe before being developed.

The actuary's argument makes which of the following assumptions?

A) Natural disasters are most costly when they strike large houses built close together.

B) A large percentage of landowners own several different lands across states.

C) The most careful site selection tends to be by owners building the more expensive houses.

D) The difference in the relief amounts paid to owners by different states has no major effect on site selection.

E) Potential builders can know which lands are secure against disaster.

I does not understand argument of these sentence

Aristocrat · Answer

Even i have chosen answer as 'D' Thanks guys for explanation :-D

Nhung · Answer

The argument concludes that the “subsidy” is a partial cause for the high percentage of houses built on disaster-prone lands, because:
- land owners are effectively insured against natural disasters because the government subsidizes all land repairs by providing emergency relief after natural disasters
- it gives owners no financial incentive to research whether the land on which they build their houses is secure against disaster
- If owners were more selective, then potential house sites would need to be safe before being developed
E - It must assume that potential buyers are able to know which sites are safe if they are more selective. If it is not, whether they do research, they cannot be more selective. If it is, the conclusion is true.

aniteshgmat1101 · Answer

Hi Guruprit,

Could you please explain how negating D weakens the conclusion???

Thanx.

nks2611 · Answer

hello, it might be very late response , see the main purpose in argument that the author wants that if landowners become more selective then govt. has to spend less amount for repair as subsidy ,so in option D even if there is no diff. in subsidies provided by diff. states then how the conclusion will work as it said the more selective they become the less govt. has to spend . so D is actually weakening the. hope it helps . :lol:

Madhavi1990 · Answer

I am also confused between D and E.

In the United States, landowners are effectively insured against natural disasters because the government subsidizes all land repairs by providing emergency relief after natural disasters. This “subsidy” is a partial cause for the high percentage of houses built on disaster-prone lands because it gives owners no financial incentive to research whether the land on which they build their houses is secure against disaster, argues an actuary. If owners were more selective, then potential house sites would need to be safe before being developed.

The actuary's argument makes which of the following assumptions?

D) The difference in the relief amounts paid to owners by different states has no major effect on site selection. -  IF IT WERE TRUE - ASSUMPTION IT DEPENDS ON - then owners would choose more selectively, which the actuary says is currently the problem. Thus if consumers get back whatever they invested, then there would be no reason to be more informed about the place of building a house. But if there was, say equal or more, there is no incentive

E) Potential builders can know which lands are secure against disaster.  In the beginning it self, author says consumers don't really asses this. Then how can it be the assumption?

akshayk · Answer

Landowners insured against natural disasters => high % of houses are built on disaster prone areas as there is no incentive to do otherwise. 
If owners were more selective, the area would need to be safe before the builders could build on them.

Gap - It's easy to know if a particular piece of land is safe.

A - Out. The arguments mentions nothing about the size of houses, or their arrangement.
B - Out. Irrelevant.
C - Out. The Argument says owners should be more selective, but it doesn't mean anything about them being careful, or if the size of a house makes a difference.
D - Out. This statement goes a little too beyond the scope of this argument. We need to make an assumption by considering the relief amount paid by govts. of different states for different areas, to even consider this as an unstated assumption for the argument.
E - Keep. Builders can know which lands are safe.

Why E?
If I negate E i.e. there is no way to know which piece of land is safe from natural disasters, then this entire argument FALLS apart. If I cannot know which piece of land is safe, no amount of financial incentive from the govt. or selection from a land owner will help in building houses in areas 'considered' safe.

That's why E is the answer.

Madhavi1990 · Answer

Oh! Yes D states too many assumptions - different states and different areas. So there could be too many answers from this. So E is the best option as it explains the behavior of the people, though it is still slightly flawed.

Thank you for the explanation!

r19 · Answer

can you break down this argument in conclusion and premises and explain how E is correct ? I read others comment but still not convinced with the description

Jyo123 · Answer

how is the answer E? arent all lands insured against disaster? Pls help

AnirudhaS · Answer

The argument says subsidy is a partial cause as people are not vigilant enough before selecting site. But if people are vigilant, the author still assumes that it is possible to know whether the land is safe.

Posted from my mobile device

sayan640 · Answer

MartyMurray   KarishmaB 
Would you like to explain option D and E ?

Posted from my mobile device

akwenok · Answer

I see it this way.

Conclusion: If owners  were more selective , then potential house sites  would need to be safe  before being developed.

Assumption: Owners CAN DETERMINE land safety, otherwise how would they tell?

(E) If the builders  CANNOT  know which lands would be secure, then why would being more selective change anything? The key subject of the argument - land security - cannot be known... hence, even the most careful consideration of the lands would NOT result in any additional knowledge on the land security

(D) The argument discusses impact of subsidies on selection behaviour, so the differences in per-state subsides would not impact the central idea. The core argument validity depends on more selectivity having an impact, hence on ability to judge safety.

In the United States, landowners are effectively insured

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In the United States, landowners are effectively insured

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