Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack
GMAT Club

 It is currently 22 Mar 2017, 23:26

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

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

price of gasoline

Author Message
Manager
Joined: 12 Feb 2008
Posts: 180
Followers: 1

Kudos [?]: 39 [1] , given: 0

Show Tags

23 Sep 2008, 06:37
1
KUDOS
2
This post was
BOOKMARKED
Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays.
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares
If you have any questions
New!
Manager
Joined: 02 Aug 2006
Posts: 116
Location: Mumbai
Followers: 1

Kudos [?]: 109 [0], given: 3

Show Tags

23 Sep 2008, 10:22
Should be D. Close call with C. But I ignored C since it is possible that city council has enough funds in hand,hence no imbalance of budget
Manager
Joined: 27 Aug 2008
Posts: 150
Followers: 0

Kudos [?]: 45 [0], given: 0

Show Tags

23 Sep 2008, 10:36
elmagnifico wrote:
Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays.
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares

Close between A & C. I think A is better. Because if people start using public transport they ofcourse will stop using their private cars. This will affect the service stations. So it must be A.

Manager
Joined: 21 Aug 2008
Posts: 206
Followers: 1

Kudos [?]: 14 [0], given: 0

Show Tags

23 Sep 2008, 13:10
jatinrai wrote:
elmagnifico wrote:
Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays.
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares

Close between A & C. I think A is better. Because if people start using public transport they ofcourse will stop using their private cars. This will affect the service stations. So it must be A.

I agree it went down to either A or C, but don't agree on the final choice. I rather go for C. If the fares suspended, they have more room to see the services...
Manager
Joined: 21 Sep 2008
Posts: 200
Concentration: Strategy, Economics
GMAT Date: 07-17-2015
GPA: 3.57
Followers: 5

Kudos [?]: 7 [1] , given: 18

Show Tags

23 Sep 2008, 18:18
1
KUDOS
I think it's A.

The council's goal is to increase savings etc, so if the new policy puts the local gas stations out of work, disposable income wouldn't increase.
_________________

Life with the GMAT:

Jerome: Ben, c'est 20 secondes de plus qu'hier sur le meme parcours! C'etait bien le meme parcours la, non?!
Gigi: Mais t'enerve pas, Jerome, je crois que t'as accroche une porte.
Jerome: *\$&#(*%&(*#%&

Retired Moderator
Joined: 18 Jul 2008
Posts: 991
Followers: 10

Kudos [?]: 206 [0], given: 5

Show Tags

23 Sep 2008, 19:24
between a and c, id go for a.
Manager
Joined: 12 Feb 2008
Posts: 180
Followers: 1

Kudos [?]: 39 [0], given: 0

Show Tags

24 Sep 2008, 05:32
you guys think too much. dont think about possible scenarios.
use only the information given.
VP
Status: Been a long time guys...
Joined: 03 Feb 2011
Posts: 1420
Location: United States (NY)
Concentration: Finance, Marketing
GPA: 3.75
Followers: 179

Kudos [?]: 1396 [0], given: 62

Show Tags

09 Oct 2011, 08:24
nice question....
was initially stuck between A and C..
but chose C finally
_________________
Intern
Joined: 12 Oct 2011
Posts: 6
Concentration: Finance, Entrepreneurship
GMAT 1: Q V0
WE: Asset Management (Mutual Funds and Brokerage)
Followers: 0

Kudos [?]: 5 [0], given: 4

Show Tags

12 Oct 2011, 20:55
I would say the same, A or C, but leaning towards C.
Senior Manager
Joined: 25 Nov 2011
Posts: 260
Location: India
Concentration: Technology, General Management
GPA: 3.95
WE: Information Technology (Computer Software)
Followers: 4

Kudos [?]: 176 [0], given: 20

Show Tags

17 Jan 2012, 08:58
Got confused between C and E and finally chose E. Damn it....the OA is C.

Then I realized the question really is what gets affected IMMEDIATELY MOSTLY...

A --> true to some extent, but they get affected slowly compared to C
E--> we can't say they get affected because, the NEW policy is something a benefit
C--> is the correct answer, because even before the plan came into picture, this would have already been affected.
_________________

-------------------------
-Aravind Chembeti

Intern
Joined: 20 Oct 2010
Posts: 32
Schools: HBS, Yale, Darden, Haas
Followers: 0

Kudos [?]: 1 [0], given: 0

Show Tags

18 Jan 2012, 09:59
+1 C
Intern
Joined: 13 Jan 2011
Posts: 3
Followers: 0

Kudos [?]: 4 [0], given: 14

Show Tags

06 Feb 2012, 04:07
My choice is C. Below is how I evaluated.

Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute. ==> Even though few people commute on their own, the revenue lost at service stations is gained by the expenses made by people at the other sectors. So I didnt go for this option.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours. ==> This eventually increases the jobs.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months. ==> The govt. has to invest more to normalize the unbalanced revenue. This might eventually lead to increase in taxes which is not good.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays. ==> Crowded conditions & travel delays are not the concern or those are the minimal outcomes which people might not take into consideration.
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares. ==> This is eventually lead to adding transportation services to the remote areas.
Intern
Joined: 30 Jan 2012
Posts: 3
Followers: 0

Kudos [?]: 0 [0], given: 0

Show Tags

06 Feb 2012, 05:29
Guys according to me all 5 are wrong here is my reasoning....................
-----------------------------------------------------------------------
Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute.
Although the local chain may see lesser number of customers but you must also remember that since the gasoline prices have increased so the will not be that much loss; also the gain for commuters is much more.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours.
Out of scope.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months.
We have to remember that the conclusion is " city’s finances on the whole will not be negatively affected by higher gasoline prices" so i feel that even though the transport department is not receiving funds but on the whole there will not be much effect.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays.
Out of scope
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares
Out of scope
Intern
Status: Applicant
Joined: 02 Jul 2011
Posts: 19
Location: India
Concentration: Operations, Strategy
WE: Operations (Energy and Utilities)
Followers: 0

Kudos [?]: 6 [0], given: 6

Show Tags

29 Aug 2013, 21:52
Why C? In the last line of the argument "the city’s finances on the whole will not be negatively affected by higher gasoline prices". this means that budget will not be affected by these changes right? Please clarify
Intern
Joined: 29 Aug 2013
Posts: 1
Followers: 0

Kudos [?]: 0 [0], given: 0

Show Tags

29 Aug 2013, 23:23
The issue is that the gasoline price isn't caused by excess demand, but the higher price of its basic form: crude oil. Of course as the previous answerer mentioned, the demand for gasoline is generally inelastic with no real substitutes.
Intern
Joined: 31 Jul 2014
Posts: 19
Followers: 0

Kudos [?]: 4 [0], given: 12

Show Tags

04 Dec 2015, 06:34
elmagnifico wrote:
Due to a sharp rise in the price of gasoline, commuters who drive to work in the center of the city are facing a large increase in transportation expenses that will limit the funds they have available to spend in other areas. In order to forestall a slowdown in the local economy, the city council has decided that fares on all forms of public transportation will be suspended for the next three months. Clearly, if commuters can get to work more cheaply, they will have more money left over to spend in other sectors of the economy, and the city’s finances on the whole will not be negatively affected by higher gasoline prices.

If all of the statements above are true, which of the following is most likely to be damaged by the city council’s plan?

* A local chain of service stations, which will see fewer customers during the daily commute.
* Members of the bus drivers’ union, who will be forced to add more routes and work longer hours.
* The city council’s budget, which will be unbalanced after receiving no revenue from transit fares for three months.
* Commuters who already use public transportation daily and who will face crowded conditions and travel delays.
* Commuters who do not live near public transportation routes and will not be able to take advantage of the suspended fares

I was struggling to choose between A and C and finally chose A. C seemed wrong because we know that people will use more more money to spend in other sectors of the economy, so I considered that this will lead to a better economic situation and higher revenue for the gov., but I guess I went too far :/
Re: price of gasoline   [#permalink] 04 Dec 2015, 06:34
Similar topics Replies Last post
Similar
Topics:
Price of raw suger 2 17 Oct 2010, 00:27
Average price of new house 9 07 Sep 2008, 07:48
low-priced newspapers and magazines 6 05 Sep 2008, 00:56
quality/price 6 17 Sep 2007, 17:03
1 Rising interest rates and consumer prices 14 16 Sep 2007, 21:42
Display posts from previous: Sort by