GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 15 Oct 2019, 17:53

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Microeconomist: Usually, the relationship between the price of a good

Author Message
TAGS:

### Hide Tags

Manager
Joined: 17 Mar 2009
Posts: 197
Microeconomist: Usually, the relationship between the price of a good  [#permalink]

### Show Tags

Updated on: 21 Sep 2018, 00:00
2
12
00:00

Difficulty:

55% (hard)

Question Stats:

65% (02:03) correct 35% (02:18) wrong based on 586 sessions

### HideShow timer Statistics

Microeconomist: Usually, the relationship between the price of a good and the demand for that product is negative: when the price goes up, the quantity demanded goes down, and vice versa. However, a dramatic increase in the price of basic foods, such as bread or milk, is likely to increase rather then decrease their consumption among the low-income households. Since the consumption of these products is relatively stable, an increase in their price will simply lower the proportion of the household’s budget spent on other, more expensive food items, such as meat or fish. In an effort to maintain the same calorie intake, the household will consume even more of the basic foods that typically remain a cheaper way to satisfy hunger even after an increase in their prices.

In the argument above, which of the following statements best describes the role played by each portion in boldface?

A) The first is evidence that the microeconomist provides in support of a certain prediction; the second is that prediction.

B) The first is a generalization that the microeconomist accepts as true; the second is a consequence that follows from that generalization.

C) The first is a pattern of cause and effect that the microeconomist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.

D) The first acknowledges a consideration against the main conclusion of the microeconomist; the second is that conclusion.

E) The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.

Originally posted by crejoc on 09 Aug 2009, 10:32.
Last edited by Bunuel on 21 Sep 2018, 00:00, edited 3 times in total.
Manager
Joined: 26 May 2009
Posts: 214
Re: Microeconomist: Usually, the relationship between the price of a good  [#permalink]

### Show Tags

10 Aug 2009, 01:07
2
C) The first is a pattern of cause and effect that the microeconomist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.

E) The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.

I was contemplating between C abd E but in E "The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue" is wrong I guess. He predicts that it WILL NOT repeat as mentioned in C and hence it should be C.

----------------
Consider a kudos if you like my answer
Intern
Joined: 26 Sep 2017
Posts: 16
Location: India
Schools: ISB '19, NUS '20, NTU '19
GMAT 1: 700 Q50 V35
GPA: 3.7
Re: Microeconomist: Usually, the relationship between the price of a good  [#permalink]

### Show Tags

07 Oct 2017, 08:09
crejoc wrote:
Microeconomist: Usually, the relationship between the price of a good and the demand for that product is negative: when the price goes up, the quantity demanded goes down, and vice versa. However, a dramatic increase in the price of basic foods, such as bread or milk, is likely to increase rather then decrease their consumption among the low-income households. Since the consumption of these products is relatively stable, an increase in their price will simply lower the proportion of the household’s budget spent on other, more expensive food items, such as meat or fish. In an effort to maintain the same calorie intake, the household will consume even more of the basic foods that typically remain a cheaper way to satisfy hunger even after an increase in their prices.

In the argument above, which of the following statements best describes the role played by each portion in boldface?

A) The first is evidence that the microeconomist provides in support of a certain prediction; the second is that prediction.

B) The first is a generalization that the microeconomist accepts as true; the second is a consequence that follows from that generalization.

C) The first is a pattern of cause and effect that the microeconomist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.

D) The first acknowledges a consideration against the main conclusion of the microeconomist; the second is that conclusion.

E) The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.

OA :

What is the case at issue is not clear in the question. hence C & E are equally correct. can someone explain me what is the case in issue. Have the prices increased excessively? (not mentioned the question only compares two situation in one situation C (if the prices has gone up excessively) is correct in other E (if prices have not gone up excessively).
Director
Joined: 24 Oct 2016
Posts: 530
GMAT 1: 670 Q46 V36
GMAT 2: 690 Q47 V38
Re: Microeconomist: Usually, the relationship between the price of a good  [#permalink]

### Show Tags

20 Sep 2018, 16:09
1
crejoc wrote:
Microeconomist: Usually, the relationship between the price of a good and the demand for that product is negative: when the price goes up, the quantity demanded goes down, and vice versa. However, a dramatic increase in the price of basic foods, such as bread or milk, is likely to increase rather then decrease their consumption among the low-income households. Since the consumption of these products is relatively stable, an increase in their price will simply lower the proportion of the household’s budget spent on other, more expensive food items, such as meat or fish. In an effort to maintain the same calorie intake, the household will consume even more of the basic foods that typically remain a cheaper way to satisfy hunger even after an increase in their prices.

In the argument above, which of the following statements best describes the role played by each portion in boldface?

A) The first is evidence that the microeconomist provides in support of a certain prediction; the second is that prediction.

B) The first is a generalization that the microeconomist accepts as true; the second is a consequence that follows from that generalization.

C) The first is a pattern of cause and effect that the microeconomist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.

D) The first acknowledges a consideration against the main conclusion of the microeconomist; the second is that conclusion.

E) The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.

OA :

Official Solution (Credit: Manhattan Prep)

The microeconomist begins his argument by describing the usual relationship between an increase in the price of a good and a decrease in the quantity demanded. Note the use of the word “usually” at the beginning of this premise, indicating that the suggested pattern of cause and effect typically holds. Thus, the first statement in boldface represents a generalization that the microeconomist accepts as accurate. The economist then goes on to conclude that for basic foods, however, the usual cause-and-effect relationship will not hold and an increase in their prices will increase rather than reduce the demand for these products on the part of the low-income households. To support this conclusion, the economist offers evidence explaining why the price increase may result in greater consumption of basic foods. Therefore, the second statement in boldface represents evidence that supports the main conclusion of the economist.

(A) This answer choice incorrectly states that the first portion supports rather than weighs against that economist’s prediction. In addition, this answer choice incorrectly states that the second portion in boldface represents the economist’s prediction rather than the evidence supporting that prediction.

(B) This answer choice correctly describes the role of the first portion but mistakenly states that the second part in boldface follows from this generalization. The second statement in boldface presents evidence that supports the opposite effect from that described in the first portion. Specifically, the economist claims that the price increase will increase rather than reduce the consumption of basic foods.

(C) CORRECT. This answer choice correctly identifies the role of each of the two parts in boldface. The first part represents the generalization that is typically accurate but will not be repeated in the case at issue. The second portion presents evidence in support of the economist’s prediction.

(D) This answer choice correctly describes the role of the first statement but incorrectly states that the second statement represents the conclusion rather than evidence supporting that conclusion. Remember, the conclusion of the economist is that the price increase will increase rather than reduce the demand for basic foods on the part of the low-income households.

(E) This answer choice incorrectly states that the first statement will be repeated in the case at issue. Remember, the economist argues that the usual pattern will not hold this time. The second statement is correctly described as acknowledging a circumstance in which the usual pattern will not hold.
_________________

If you found my post useful, KUDOS are much appreciated. Giving Kudos is a great way to thank and motivate contributors, without costing you anything.
Re: Microeconomist: Usually, the relationship between the price of a good   [#permalink] 20 Sep 2018, 16:09
Display posts from previous: Sort by