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Mansour: We should both plan to change some of our investments from co

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Mansour: We should both plan to change some of our investments from co  [#permalink]

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New post 22 Sep 2019, 11:35
3
00:00
A
B
C
D
E

Difficulty:

  55% (hard)

Question Stats:

59% (01:50) correct 41% (02:02) wrong based on 152 sessions

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Mansour: We should both plan to change some of our investments from coal companies to less polluting energy companies. And here's why. Consumers are increasingly demanding nonpolluting energy, and energy companies are increasingly supplying it.

Therese: I'm not sure we should do what you suggest. As demand for nonpolluting energy increases relative to supply, its price will increase, and then the more polluting energy will cost relatively less. Demand for the cheaper, dirtier energy forms will then increase, as will the stock values of the companies that produce them.

Therese responds to Mansour's proposal by doing which of the following?

A. Advocating that consumers use less expensive forms of energy

B. Implying that not all uses of coal for energy are necessarily polluting

C. Disagreeing with Mansour's claim that consumers are increasingly demanding nonpolluting energy

D. Suggesting that leaving their existing energy investments unchanged could be the better course

E. Providing a reason to doubt Mansour's assumption that supply of nonpolluting energy will increase in line with demand


CR03161.01
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Re: Mansour: We should both plan to change some of our investments from co  [#permalink]

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New post 24 Sep 2019, 11:29
Here is how to eliminate E.

Nowhere in the stem Therese gives a reason or indication that supply will not increase in line with demand. Besides, Mansour's assumption was not that supply = demand. he simply states that supply and demand are increasing.

D wins
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Re: Mansour: We should both plan to change some of our investments from co  [#permalink]

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New post 29 Sep 2019, 02:21
gmatt1476 wrote:
Mansour: We should both plan to change some of our investments from coal companies to less polluting energy companies. And here's why. Consumers are increasingly demanding nonpolluting energy, and energy companies are increasingly supplying it.

Therese: I'm not sure we should do what you suggest. As demand for nonpolluting energy increases relative to supply, its price will increase, and then the more polluting energy will cost relatively less. Demand for the cheaper, dirtier energy forms will then increase, as will the stock values of the companies that produce them.

Therese responds to Mansour's proposal by doing which of the following?

A. Advocating that consumers use less expensive forms of energy

B. Implying that not all uses of coal for energy are necessarily polluting

C. Disagreeing with Mansour's claim that consumers are increasingly demanding nonpolluting energy

D. Suggesting that leaving their existing energy investments unchanged could be the better course

E. Providing a reason to doubt Mansour's assumption that supply of nonpolluting energy will increase in line with demand


CR03161.01


Official Explanation

Argument Construction

Which one of the answer options best describes the response of Therese to Mansour?

Mansour advocates that Therese and he should replace their investments in coal companies with investments in companies producing less polluting energy. He suggests this because there is both an increasing demand for and increasing supply of such energy.

However, Therese responds that as demand for clean energy increases, its prices will increase. These higher prices will increase demand for cheaper, dirtier energy. This will boost the stock prices of companies producing such dirty energy, for example, coal. The point of Therese's response is that since the stock prices of coal companies and other companies producing dirty energy will likely increase, investments in these stocks will increase in value. This provides a financial reason not to do what Mansour advocates.

A. Therese does not advocate that consumers use polluting energy; she simply predicts that the stock values of producers of polluting energy are likely to increase as the prices of polluting energy decrease relative to the prices of non-polluting energy.

B. Therese does not imply that there exist non-polluting uses of coal; in fact, she appears to agree with Mansour that coal is a dirty form of energy.

C. There is nothing to indicate that Therese disagrees with Mansour regarding whether consumers are increasingly demanding non-polluting energy.

D. Correct. This accurately captures the main point of Therese's response to Mansour: she provides a particular reason that maintaining their current investments could be a better option.

E. Therese does not directly address the question of whether this assumption of Mansour's is correct. Even if she implies that Mansour's assumption is incorrect, this is not the main point of her response to Mansour.

The correct answer is D.
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Re: Mansour: We should both plan to change some of our investments from co   [#permalink] 29 Sep 2019, 02:21
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