To understand this argument, let's take a more straightforward argument.
Sarah: "I read that 80% of people in this city own a smartphone."
John: "Interesting, Sarah. If we randomly survey 20 people in this city, at least 16 will likely own a smartphone."
In this argument, John assumes that the people they survey represent the entire city's population. If the city's population has unique characteristics, John's assumption might not hold.
Now, back to our argument. What are we required to do in this question? We are asked about an assumption in Sharon's argument. What is Sharon's argument? To understand Sharon's argument, let us first understand Roland's point.
Roland: The alarming fact is that 90 percent of the people in this country now report that they know someone who is unemployed.
What is he trying to say? He is trying to highlight the alarming nature of the fact that 90 percent know someone unemployed. By the way, this is a useless way of saying things. For example, On the news, they broadcast that Mr. John, who was employed with company X as CEO, has been fired. 100% of people in the country of 350 million watched the news, and now 100% know someone unemployed. For the same discussion, if a country of 350 million people, just this person is unemployed and by the way 100% of people know, is it alarming in any way? No. But anyway, let's not go there and deviate from the question.
Sharon's argument.
Sharon: But a normal, moderate level of unemployment is 5 percent, with 1 out of 20 workers unemployed. So, at any given time, if a person knows approximately 50 workers, one or more will very likely be unemployed.
Can we identify the conclusion and premise of the argument? Because we need assumption. What is an assumption - it's a necessary bridge between premise and conclusion. So, back to the basics first, what is the argument's conclusion? Because if we don't know the conclusion, this will feel like a challenging problem, but if we know, it's comparatively straightforward.
So here we go:
Premise: A normal, moderate level of unemployment is 5 percent, with 1 out of 20 workers unemployed.
Conclusion: So, at any given time, if a person knows approximately 50 workers, one or more will likely be unemployed. (It means the fact that 90 percent of the people in this country now report that they know someone unemployed is normal)
A simple structure of Sharon's argument is to state some facts and conclude based on those facts. Let's take it a bit further.
Sharon's argument is to state some facts (say she states 5% of people in Chicago are unemployed) and conclude based on those facts (say anywhere in the country, if you know 50 people, one or more will be unemployed). WAIT What? This is ridiculous? How can I conclude for the entire country just based on Chicago?
This is what Sharon smartly did. She assumed that Chicago was representative of the entire United States. This is the assumption: what choice B states? Yes. To make our example work, we must assume that "unemployment is not concentrated in Chicago." Without that assumption, the argument falls apart.
Option elimination -
(A) normal levels of unemployment are rarely exceeded - Sharon's argument. Chicago's average unemployment rate is 5%, so anywhere in the country, if you know 50 people, one or more will be unemployed. Does "normal levels of unemployment rarely exceed" affect the scope of the argument? No. Out of scope.
(B) unemployment is not normally concentrated in geographically isolated segments of the population - negate this choice in line with our discussion. Unemployment is normally concentrated in Chicago. It means it's not representative of the country, breaking the conclusion.
(C) the number of people who each know someone who is unemployed is always higher than 90% of the population - It's higher than 90% or lower than 90%. It's irrelevant to Sharon's argument, which alludes to the fact that practically everyone in the country would know someone unemployed. Distortion.
(D) Roland is not consciously distorting the statistics he presents - The question scope is limited to Sharon's argument. Does it even talk about Sharon's argument? No. Out of scope. One request: on GMAT, the facts are respected, period.
(E) knowledge that a personal acquaintance is unemployed generates more fear of losing one's job than does knowledge of unemployment statistics - The question scope is limited to Sharon's argument. Does it even talk about Sharon's argument? No. Out of scope.
By the way, Chicago, known as the windy city, is one of the greatest cities in the US. If you live here, you'll cherish the diverse culture, architecture, and culinary scene.