rohansherry wrote:
153. Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.
Solar energy more cost efficient now BUT economic viability unchanged. WHY?
Which of the following, if true, does most to help explain why the increased cost-efficiency of solar power has not decreased its threshold of economic viability?
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(A) The cost of oil has fallen dramatically.
Great to know, but isn't solar energy FREE of cost for about 12 hours a day? Then why would oil still be economically more viable? Maybe if we can produce more electricity per unit of oil, then it would make sense.
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(B) The reduction in the cost of solar-power equipment has occurred despite increased raw material costs for that equipment.
This is good news, but it's irrelevant and doesn't help explain the discrepancy. OUT!
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(C) Technological changes have increased the efficiency of oil-fired power plants.
This looks good. If the tech changes have increased the efficiency of oil-fired power plants, it means these plants can produce more electricity per unit of oil. This would explain explain why the viability of solar plants has remained unchanged, as oil plants have become even more viable. KEEP!
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(D) Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants.
This is irrelevant. OUT!
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(E) When the price of oil increases, reserves of oil not previously worth exploiting become economically viable.
We are concerned with the viability of new oil plants vs. new solar plants and not new reserves of oil. OUT!
Between A & C, C is definitely better.
C is the answer.
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