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In the year following an eight-cent increase in the federal

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In the year following an eight-cent increase in the federal  [#permalink]

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New post Updated on: 18 Apr 2014, 04:44
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In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent. In contrast, in the year prior to the tax increase, sales had fallen one percent. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.

Which of the following, if true, would most strengthen the argument above?

A. During the second year after the tax increase, cigarette sales increased by a significant amount.
B. The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.
C. Most consumers were unaware that the tax on cigarettes was going to increase.
D. During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.
E. During the year after the tax increase, there was a greater variety of cigarettes on the market than there had been during the previous year.

Originally posted by royinkol on 17 Apr 2014, 00:50.
Last edited by royinkol on 18 Apr 2014, 04:44, edited 3 times in total.
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Re: New Question for old stimuli  [#permalink]

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New post 17 Apr 2014, 04:46
OA is (B)

Since, here, its a 'X' leads to 'Y' scenario here, we have to rule out any alternate cause. Since, an increased awareness about the harmful effects of smoking can be one, that can count as one
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Re: New Question for old stimuli  [#permalink]

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New post 17 Apr 2014, 08:01
reetskaur wrote:
OA is (B)

Since, here, its a 'X' leads to 'Y' scenario here, we have to rule out any alternate cause. Since, an increased awareness about the harmful effects of smoking can be one, that can count as one


But,(B) neither strengthens nor weakens.is E a possibility?Considering the fact that the consumers had more choices,yet the sale plummeted.
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 18 Apr 2014, 04:21
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 19 Nov 2015, 05:09
Hi carcass,

I read Ron's reply in MGMAT site..

I want some more clarification. Kindly help here... His analysis assumes that the general public already had good knowledge of the ill effects of smoking a cigar..(for option B)

Per option D, we have another good reason as to why someone should leave smoking(ie. without assuming anything further as done by option B).. what is your take on it?

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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 19 Nov 2015, 09:12
dominicraj wrote:
Hi carcass,

I read Ron's reply in MGMAT site..

I want some more clarification. Kindly help here... His analysis assumes that the general public already had good knowledge of the ill effects of smoking a cigar..(for option B)

Per option D, we have another good reason as to why someone should leave smoking(ie. without assuming anything further as done by option B).. what is your take on it?

Regards,
Dom.



I consider this question as a cause and effect relationship - Federal Tax---------> Sale of cigerette

For strenthening Cause and effect relationship Powerscore CR suggests -

1. Eliminate alternate cause of the stated effect
2. Show Cause Occurs and the effect also occurs
3. Show that Cause doesn't occur , effect also doesn't occur
4. Eliminate the possibility that the stated relationship can be reversed
5. Show date used to make casual statement is accurate / eliminate possible problems with the data

Option (B) is doing just that , it is eliminating the alternate cause for reduction in sale of cigerettes , hence IMHO (B)
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 02 May 2018, 23:49
Hi Experts,

Can you please let us know why E is not correct for this?
B talks about health hazards and E talks about direct income available to consumer. Argument mainly talks about tax - which is related to money available to spend. So E seems to be correct option. Request your inputs on this.
Thanks!
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 04 May 2018, 00:35
royinkol wrote:
In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent. In contrast, in the year prior to the tax increase, sales had fallen one percent. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.

Which of the following, if true, would most strengthen the argument above?

A. During the second year after the tax increase, cigarette sales increased by a significant amount.
B. The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.
C. Most consumers were unaware that the tax on cigarettes was going to increase.
D. During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.
E. During the year after the tax increase, there was a greater variety of cigarettes on the market than there had been during the previous year.


The conclusion is that the tax increase was responsible for the reduction in the volume of cigarettes sold . We have to reinforce this conclusion with other information or we can remove other cause that can lead to conclusion .
B does just does just that .
If information regarding smoking is the same as before and after the tax increase then the volume reduction in was solely due to the tax increase .
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In the year following an eight-cent increase in the federal  [#permalink]

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New post 04 May 2018, 00:38
meetnikhil wrote:
Hi Experts,

Can you please let us know why E is not correct for this?
B talks about health hazards and E talks about direct income available to consumer. Argument mainly talks about tax - which is related to money available to spend. So E seems to be correct option. Request your inputs on this.
Thanks!


Hi ,
Although i am no expert i will try to answer your query .
Choice in any way does not affect the argument rather if that is the case then it should let people try new brands and varieties . This may cause the volume of the cigarettes to rise or may be not we can not say for sure .

Hope it is clear now
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 08 May 2018, 19:11
meetnikhil wrote:
Hi Experts,

Can you please let us know why E is not correct for this?
B talks about health hazards and E talks about direct income available to consumer. Argument mainly talks about tax - which is related to money available to spend. So E seems to be correct option. Request your inputs on this.
Thanks!

Thanks arvind910619 for your reply! I'll add my two cents...

meetnikhil, I think you meant to say "D", not "E" (E doesn't talk about income)?

The author is trying to argue that "the volume of cigarette sales is strongly related to the after-tax price of a pack of cigarettes." Why? Well, when cigarette taxes went up, sales fell sharply. So it seems as though a price increase caused sales to drop.

But (D) tells us that the income of many consumers dropped. Maybe that explains why sales fell. In other words, despite the price increase, perhaps sales would NOT have fallen if consumers' incomes had remained steady. (D) suggests that it may have been income, not after-tax price, that caused the sharp decline, so this could actually weaken the argument.

As for (B), what if "the information available to consumers on the health risks of smoking" greatly INCREASED in the period before and after the tax increase? Maybe cigarette sales dropped as people became more aware of the health risks. (B) gives us an alternative explanation for the data, suggesting that the drop in sales may not have had anything to do with the increase in price. Perhaps sales would NOT have fallen, despite the price increase, if information on health risks had not increased.

But (B) tells us that this is not the case. The information available to consumers did NOT change, so the drop in sales had nothing to do with information on health risks. By eliminating another possible explanation, (B) strengthens the argument.

I hope that helps!
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Re: In the year following an eight-cent increase in the federal  [#permalink]

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New post 09 Jul 2018, 21:03
here is my take on it

B clearly states that other cause is not possible and sales decline due to increase of price of cigarettes.

D sounds tempting but D is some what incomplete , it shows that income is decreased but it does not tell us whether how much of decreased income related to sale of cigarettes.
whether less income lead to decrease in sales .. we dont know .. so it is not correct

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Re: In the year following an eight-cent increase in the federal &nbs [#permalink] 09 Jul 2018, 21:03
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