Most economists in the United States seem captivated by the spell of t

Hey experts,

GMATNinja KarishmaB ExpertsGlobal5

Could you please explain why option A is incorrect in question 1. In first line it is mentioned that most economists are captivated by free market, but few lines later author criticises it.

The entire passage talks about why price fixing by the seller works. It doesn't refute that free market plays a useful role. It only says that even though price fixing is against the free market tenet, it is still useful to the economy.

Notice the beginning of the passage:

Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does not accord with the requirements of the free market. A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to think of price-fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because ...

The passage starts with the mention of free market and that price fixing seems unacceptable to economists because it is against the free market ideology. Then the passage says that that is why to think of price fixing as useful needs a lot of effort. Then he goes on to say that price fixing is indeed useful and normal because ... and thus continues the rest of the passage.

The point of the passage is that price fixing is normal and useful.

Question 1

Question 1 asks us to find the author's primary purpose. Here's (A):

You're right that the author criticizes economists who "seem captivated by the spell of the free market." But that's way different than saying that the free market doesn't play a useful role at all.

The author just thinks that these economists are so blinded by love of the free market that they miss the importance of price-fixing. He/she never argues that the free market isn't also important -- instead, he/she just says that price-fixing is a component overlooked by these economists.

So, it's not quite right to say that the author refutes the useful role of the free market. Eliminate (A) for question 1.

I hope that helps!

GMATNinja
KarishmaB
egmat
EMPOWERgmatVerbal RonTargetTestPrep TommyWallach and all GMAT expert

This passage is big and I got confused in what passage is trying to say at one point. If the same happens in exam, what should I do?
For instance, in paragraph 2
"Moreover, those economists who argue that allowing the free market to operate without interference is the most efficient method of establishing prices have not considered the economies of non-socialist countries other than the United states."

Here is some change of opinion without any background: Were there something peculiarly efficient about the free market and inefficient about price-fixing, the countries that have avoided the first and used the second would have suffered drastically in their economic development. There is no indication that they have.

I tend to re-read quite frequently while solving verbal questions

I read random articles and I understood sentences quite easily without the need to re-read. (source of article : The Economist).
So I think THE SOLE REASON for this re-reading is the pressure I am in while solving the question.

Now, there will be (atleast for me) a huge difference in degree of pressure while solving question in the exam than solving questions in the the mock or from question bank. In exam, I will not be confident as to whether I have understood the sentence properly + being in the pressure will make it difficult to focus on what the sentence is trying to say

Practicing question in timed fashion doesn't seem to be the solution because the kind of pressure will be different. What do you suggest I should be doing . Also, the way I should practise question so that I can handle the exam situation.

The more you obsess about it, the worse it is going to get. We know that if we do not get our target score in the actual exam, we can cancel it and no one will be the wiser. That should give you some re-assurance in the actual test. It is not a make or break situation, so take a deep breath and do your best. Meanwhile, practice under timed conditions and if required, give yourself even less time than is available on the actual test.

This passage is complete garbage. I can see why you had to re-read it a bunch of times—it's so horribly written that it's practically unintelligible.
I don't know where this passage came from, but it's definitely not official. (GMAC's passages are tightly organized and VERY well written.) Please ignore it.

Got all Right !!!!!!!!!!!!!!!!1

For question 2, is the support in the passage here for Choice A?
--> "That each large firm will act with consideration of its own needs and thus avoid selling its products for more than its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with full consideration of the needs that it has in common with the other large firms competing for the same customers. Each large firm will thus avoid significant price-cutting, because price-cutting would be prejudicial to the common interest in a stable demand for products. Most economists do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not."

Read the official explanation in the post in the link below.

https://gmatclub.com/forum/most-economi ... l#p2167057

Best.

Sajjad1994
I appreciate your reply, but the reason why I requested an expert response was because I was still seeking clarity after reading the thread. The post you redirected me to was vague, thus for my follow-up question.

Question 2

Here's question 2:

The author discusses several methods of price fixing. The first one, as you've mentioned, is discussed in the second half of the first paragraph.

Additionally, the author mentions that "formal price-fixing by cartel and informal price-fixing by agreements covering the members of an industry are commonplace" in non-socialist countries outside of the US.

Both of these sections provide some ways for prices to be fixed, so (A) is the correct answer.

I hope that helps!

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