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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Dhruvnneo wrote:
RC00141-05 Which of the following best describes the organization of the passage?

(A) The author explores the origins of a theory and explains why the theory never gained widespread acceptance.

(B) The author introduces the premise of a theory, evaluates the premise by relating it to objective reality, then proposes a modification of the theory.

(C) After quoting a well-known authority, the author describes the evolution of a theory, then traces its modern form back to the original quotation.

(D) After citing a precursor of a theory, the author outlines and refutes the theory, then links its flaw to the precursor.

(E) After tracing the roots of a theory, the author attempts to undermine the theory by discrediting its originator.

why is option D correct and not E.
as per para2 author seems to be undermining the theory .


"discrediting" is the word which is why E is wrong.

D is correct, because in the last para author says "The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame." Here, the flaw is linked to the precursor. The originator is not getting discredited.

Hope this helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
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Questions 3 & 6


gvvsnraju@12 wrote:
Hi GMATNinja Gnpth SajjadAhmad

Why D is the OA for Q.No:6, RC00141-07.

Per my understanding:
Followers of Locke find that LTOV is acceptable. Formulators of LTOV held that entire credit must go to workmen and employers should not view it in profit perspective.

My doubt is, How we can infer that the formulators of LTOV are familiar with Locke's theory.

Take a look at this post for an explanation of (D) for question #6, and let me know whether that clears it up!

RaunaqSinghPunn wrote:
RC00141-04 Which of the following statements, if true, would most effectively counter the author's criticism of Locke at the end of the passage?

(A) Locke was unfamiliar with the labor theory of value as it was formulated by his intellectual heirs.

(B) In Locke's day, there was no possibility of ordinary workers becoming shareholders or pension beneficiaries.

(C) During Locke's lifetime, capital goods did not make a significant productive contribution to the economy.

(D) The precise statistical calculation of the productive contributions of labor and capital goods is not possible without computers.

(E) The terms “capital goods” and “consumer goods” were coined by modern economists and do not appear in Locke's writings.

daagh GMATNinja
Can anybody please explain why "E" is incorrect?
If those terms/bifurcation did not exist at that time when theory was created, how can those be considered. Thereby, countering the author's criticism.

Thanks in advance!

(E) specifies that the terms did not appear in Locke's writings, which is different than saying that the things that those terms refer to did not exist at that time. The fact that the terms did not exist in their current form is not an effective counter to author's argument.

Here's an example: a person went on an unprovoked murderous rampage and then stole a sandwich in ancient times, before the words "murder" and "sandwich" were coined. We can still criticize this person's actions as immoral, even if the terms for those actions did not yet exist.

Similarly, the author can still hold Locke accountable for disregarding the contribution of "capital goods," even if the term did not yet exist at the time of Locke's writings.

I hope that helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Quote:
(E) specifies that the terms did not appear in Locke's writings, which is different than saying that the things that those terms refer to did not exist at that time. The fact that the terms did not exist in their current form is not an effective counter to author's argument.

Here's an example: a person went on an unprovoked murderous rampage and then stole a sandwich in ancient times, before the words "murder" and "sandwich" were coined. We can still criticize this person's actions as immoral, even if the terms for those actions did not yet exist.

Similarly, the author can still hold Locke accountable for disregarding the contribution of "capital goods," even if the term did not yet exist at the time of Locke's writings.

I hope that helps!


I was going to tag you ( GMATNinja ) for the same question but then found this explanation. And looks like your sandwich made things clear to me and made me hungry too.

Thank you!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Hi GMATNinja,
Can you please explain why C is the answer to question 1 ? The option states that the author's main point is to question the 'validity' of the LTOV. But I don't think the author is doing so. I believe he points out a limitation or a flaw in the theory, and on the basis of this reasoning I marked B. Do you agree ?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
GMATNinja, I hope you can help me with my analysis.

For Qs 1. Why is option E wrong? /

From the passage, I felt that the workers received more than their value. They got 2/3rd of the compensation in proportion to the value added to total output and also the pension/shareholder advances etc.

When I was analyzing the answer later, the reason I came up with to prove answer E wrong was that maybe some workers owned capital as shareholders. Also even if the workers were paid more, was it because companies were following 'labour theory of value'? (which overestimates value of labour) Possibly not

Is this line of reasoning correct?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
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Bhavyam wrote:
GMATNinja, I hope you can help me with my analysis.

For Qs 1. Why is option E wrong? /

From the passage, I felt that the workers received more than their value. They got 2/3rd of the compensation in proportion to the value added to total output and also the pension/shareholder advances etc.

When I was analyzing the answer later, the reason I came up with to prove answer E wrong was that maybe some workers owned capital as shareholders. Also even if the workers were paid more, was it because companies were following 'labour theory of value'? (which overestimates value of labour) Possibly not

Is this line of reasoning correct?

To refresh, here's what we were asked:

Quote:
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

And here's the exact wording of Choice (E):

Quote:
(E) Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.

For us to keep (E), both parts of the choice must be true:

    I. Workers receive a share of the distribution of the income derived from total output that is greater than the value of their labor in creating that output.

    II. Workers receive this disproportionately greater share of income because the labor theory of value overestimates their contribution to total output.

In paragraph 2, the author tells us that "one-third of the total output of consumer goods is attributable to the use of capital goods." This suggests that the other 2/3 of total output is attributable to labor.

Then the author states that "approximately 2/3 of the income derived from this total output is paid out to workers as wages and salaries," and adds that part of the remaining 1/3 is "received by workers who are shareholders, pension beneficiaries, and the like."

As you've pointed out, this implies that workers do, in fact, receive a share of this income that's greater than the value of their labor. So part I of choice (E) seems to hold up.

Unfortunately, part II of choice (E) is not reflected by the passage at all. We're told flat-out that the reason some workers receive additional share is because they might own shares in their companies or be entitled to pension benefits. They are NOT receiving additional share because the labor theory of value overestimates their contribution.

The author never states or suggests that these forms of additional share are provided because the workers' contributions are overestimated, and never attributes shareholdings, pension benefits, and the like to any kind of belief in the labor theory of value.

I hope this helps clarify why and how to eliminate (E)!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
GMATNinja wrote:
You're right to recall where the passage states that owners pay part of their share to employee shareholders and pension beneficiaries.

However, choice (D) doesn't match this statement. Instead, choice (D) states:

    Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

What's that? According to the passage, do owners pay out most of their share in the form of wages and benefits? Nope. This differs greatly from what's written in the passage, mixing up how the income is distributed.

That's why (D) is not supported by the passage, and that's why we eliminate it.


I hope this is helpful!

Dear GMATNinja
do you mean the passage states :
Quote:
Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries,
, rather than share?

please help
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
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zoezhuyan wrote:
GMATNinja wrote:
You're right to recall where the passage states that owners pay part of their share to employee shareholders and pension beneficiaries.

However, choice (D) doesn't match this statement. Instead, choice (D) states:

    Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

What's that? According to the passage, do owners pay out most of their share in the form of wages and benefits? Nope. This differs greatly from what's written in the passage, mixing up how the income is distributed.

That's why (D) is not supported by the passage, and that's why we eliminate it.


I hope this is helpful!

Dear GMATNinja
do you mean the passage states :
Quote:
Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries,
, rather than share?

please help

The passage discusses the total income resulting from the output of consumer goods, and how this total income is shared between the owners of capital goods and workers.

One-third of the total output of consumer goods is attributable to capital goods, so the "share" owners of capital goods is one-third of the total income.

So, while "most" (two-thirds) of the total income is paid out to workers, we do not know that "most" of the remaining one-third -- the share of the capital goods owners -- is paid to workers. We only know that "part of this remaining third is received by workers."

I hope that clears it up!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
GMATNinja wrote:
zoezhuyan wrote:
GMATNinja wrote:
You're right to recall where the passage states that owners pay part of their share to employee shareholders and pension beneficiaries.

However, choice (D) doesn't match this statement. Instead, choice (D) states:

    Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

What's that? According to the passage, do owners pay out most of their share in the form of wages and benefits? Nope. This differs greatly from what's written in the passage, mixing up how the income is distributed.

That's why (D) is not supported by the passage, and that's why we eliminate it.


I hope this is helpful!

Dear GMATNinja
do you mean the passage states :
Quote:
Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries,
, rather than share?

please help

The passage discusses the total income resulting from the output of consumer goods, and how this total income is shared between the owners of capital goods and workers.

One-third of the total output of consumer goods is attributable to capital goods, so the "share" owners of capital goods is one-third of the total income.

So, while "most" (two-thirds) of the total income is paid out to workers, we do not know that "most" of the remaining one-third -- the share of the capital goods owners -- is paid to workers. We only know that "part of this remaining third is received by workers."

I hope that clears it up!


hi GMATNinja, I think my problem is my interpretation, but I am still not sure where is incorrect.
in order to address my interpretation, I would like to plug number.

say, if the total income is 60,
workers as salary = 40
capital goods owner = 20,
part of the remaining third is received by workers who are shareholders, and like = say 10,

then workers = 40 + 10 =50, most of total income(. of course , more than owner's share. I am not sure whether it is correct to say most of owner's share.

am I correct now?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
All correct in 9m34s. Felt hard.Thanks for posting.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Expert Reply
zoezhuyan wrote:
GMATNinja wrote:
You're right to recall where the passage states that owners pay part of their share to employee shareholders and pension beneficiaries.

However, choice (D) doesn't match this statement. Instead, choice (D) states:

    Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

What's that? According to the passage, do owners pay out most of their share in the form of wages and benefits? Nope. This differs greatly from what's written in the passage, mixing up how the income is distributed.

That's why (D) is not supported by the passage, and that's why we eliminate it.


I hope this is helpful!
Dear GMATNinja
do you mean the passage states :
Quote:
Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries,
, rather than share?

please help

The passage discusses the total income resulting from the output of consumer goods, and how this total income is shared between the owners of capital goods and workers.

One-third of the total output of consumer goods is attributable to capital goods, so the "share" owners of capital goods is one-third of the total income.

So, while "most" (two-thirds) of the total income is paid out to workers, we do not know that "most" of the remaining one-third -- the share of the capital goods owners -- is paid to workers. We only know that "part of this remaining third is received by workers."

I hope that clears it up!


zoezhuyan wrote:
hi GMATNinja, I think my problem is my interpretation, but I am still not sure where is incorrect.
in order to address my interpretation, I would like to plug number.

say, if the total income is 60,
workers as salary = 40
capital goods owner = 20,
part of the remaining third is received by workers who are shareholders, and like = say 10,

then workers = 40 + 10 =50, most of total income(. of course , more than owner's share. I am not sure whether it is correct to say most of owner's share.

am I correct now?

In your example, the owner's share is $20. Notice that this is different than the total income -- we are only concerned about what happens to this exact $20, NOT the rest that has already been paid out to workers.

For (D) to be correct, MOST of that $20 -- so, more than $10 -- would need to be paid out to workers.

The passage tells us that "part" of that $20 is received by workers as shareholders/pension beneficiaries. Sticking with your example, it is possible that the owner gives out $10 of his/her $20 to these workers. Clearly, the owner hasn't given away MOST of his/her share -- he's just given away half of his/her share.

In the bigger picture, it is not worth getting bogged down in a question like this -- if you're struggling to understand the question in a timely manner, the best thing to do is to save time by moving on to the next question. :)

I hope that helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Can someone explain why (D) isn't the answer for question 1. And (E) for question 6. Thank you!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Can someone help me understand how the formulators were familiar with Locke's views on the relationship between labor and the value of products making option D correct?

RC00141-07 The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.

(B) Their views were too radical to have popular appeal.

(C) At least one of them was a close contemporary of Locke.

(D) They were familiar with Locke's views on the relationship between labor and the value of products.

(E) They underestimated the importance of consumer goods in a modern economy.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
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Question 6


Sarabjeet1 wrote:
Can someone help me understand how the formulators were familiar with Locke's views on the relationship between labor and the value of products making option D correct?

RC00141-07 The author of the passage implies which of the following regarding the formulators of the labor theory of value?

(A) They came from a working-class background.

(B) Their views were too radical to have popular appeal.

(C) At least one of them was a close contemporary of Locke.

(D) They were familiar with Locke's views on the relationship between labor and the value of products.

(E) They underestimated the importance of consumer goods in a modern economy.

The author implies this familiarity in two places:

    "For Locke’s intellectual heirs it was only a short step to the 'labor theory of value,' whose formulators held that 100 percent of the value of any product is generated by labor..."

Here, the author implies that the labor theory of value was formulated by Locke's intellectual heirs, i.e. the people who inherited his philosophies or teachings.

    "The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame."

This is a less direct form of implication. But in connecting this challenge to the theory back to Locke, the author is broadly re-asserting that Locke's work has influenced the formulators of the theory.

I hope that helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
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Question 1


Utkarsh077 wrote:
Hi GMATNinja,
Can you please explain why C is the answer to question 1 ? The option states that the author's main point is to question the 'validity' of the LTOV. But I don't think the author is doing so. I believe he points out a limitation or a flaw in the theory, and on the basis of this reasoning I marked B. Do you agree ?

If you believe that the author's primary concern is to point out a limitation or a flaw in the theory, then you should eliminate choice (B).

Here's precisely what (B) says:

Quote:
The author of the passage is primarily concerned with (B) discounting the contribution of labor in a modern economy

The word "theory" doesn't appear at all in this choice. So if we pick (B), we are saying the author's primary concern is to discount the contribution of labor itself in a modern economy.

This doesn't line up with what the author has written. The author's second paragraph clearly begins with the recognition that "human effort is required to produce goods for the consumer market," and implies that two-third of the total of output of consumers goods is attributable to labor.

The author is NOT discounting the contribution of labor. The author IS discounting the labor theory of value, and uses the second paragraph to illustrate how this theory "systematically disregards the productive contribution of capital goods."

That purpose is much more closely matched to choice (C), and so is your original determination that "he points out a limitation or a flaw in the theory."

mansi1999 wrote:
Can someone explain why (D) isn't the answer for question 1.Thank you!

Here's precisely what choice (D) says:

Quote:
The author of the passage is primarily concerned with (D) arguing for a more equitable distribution of business profits

The most direct explanation is that the author never makes an effort to argue for a more equitable distribution of profits.

The author uses paragraph 1 to explain the labor theory of value, then uses paragraph 2 to illustrate a key failing of that theory (it systematically disregards the productive contribution of capital goods).

The overall purpose of these two paragraphs is to question the theory. The author only brings up distribution of profits to show that the portion of income paid out as compensation to the owners of capital goods (1/3) roughly matches the portion of output already attributable to the use of capital goods (1/3).

This is NOT an argument for "more equitable" distribution of profits. It's evidence that the distribution seems fair as it is (contrary to the labor theory of value). If anything, the labor theory of value is making a case for more equitable distribution, and the author is writing this passage in order to question the merits of that case.

I hope this helps both of you!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
GMATNinja, could you please explain option E of RC00141-02 and option C (contibution to economy phrase) of RC00141-04?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 [#permalink]
Got 5/6 correct and time taken 10 minutes 30 seconds approx :)
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