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Seventeenth-century philosopher John Locke stated that as much as 99

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Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post Updated on: 05 Aug 2018, 21:28
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58% (02:15) correct 42% (02:32) wrong based on 138

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63% (01:51) correct 37% (01:38) wrong based on 126

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65% (01:07) correct 35% (01:15) wrong based on 124

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71% (01:12) correct 29% (01:24) wrong based on 115

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82% (01:24) correct 18% (01:32) wrong based on 104

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62% (01:04) correct 38% (01:16) wrong based on 99

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Seventeenth-century philosopher John Locke stated that as much as 99 percent of the value of any useful product can be attributed to “the effects of labor.” 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 (the human work needed to produce goods) and that therefore the employer who appropriates any part of the product’s value as profit is practicing theft.

Although human effort is required to produce goods for the consumer market, effort is also invested in making capital goods (tools, machines, etc.), which are used to facilitate the production of consumer goods. In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods. Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like. The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.
RC00141-01
The author of the passage is primarily concerned with

(A) criticizing Locke's economic theories

(B) discounting the contribution of labor in a modern economy

(C) questioning the validity of the labor theory of value

(D) arguing for a more equitable distribution of business profits

(E) contending that employers are overcompensated for capital goods



RC00141-02 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?

(A) Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.

(B) Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.

(C) Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

(D) 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.

(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.


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.



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.


RC00141-06 Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to lines 23–25 (last sentence in bold) ?

(A) The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.

(B) The author's analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.

(C) Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.

(D) The productive contribution of capital goods must be discounted because capital goods require maintenance.

(E) The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor.



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.





Same Text with Fewer Questions appears here: https://gmatclub.com/forum/seventeenth- ... 90904.html

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Originally posted by bb on 04 Aug 2018, 12:28.
Last edited by bb on 05 Aug 2018, 21:28, edited 1 time in total.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 04 Aug 2018, 21:14
guys can someone explain why option A of question 1 is incorrect or share diffrence between "criticizing" and " questioning the validity".
in regard to question 1.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 04 Aug 2018, 22:34
2
shubham2312 wrote:
guys can someone explain why option A of question 1 is incorrect or share diffrence between "criticizing" and " questioning the validity".
in regard to question 1.
Option A talks about "theories", but the passage is talking about only one theory.

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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 05 Aug 2018, 21:25
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Hey bb

It would be really helpful if you bold faced the lines 23-25 for question 5.(Though I guessed them to be the last sentences of para 2 :grin: )
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 05 Aug 2018, 21:29
gmat1393 wrote:
Hey bb

It would be really helpful if you bold faced the lines 23-25 for question 5.(Though I guessed them to be the last sentences of para 2 :grin: )



Thx. Done. Thank you for pointing it out.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 06 Aug 2018, 06:09
Can someone help me with question 1 and 2? i understand how C is answer in question 2 but i cant rule out E too...
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 06 Aug 2018, 06:50
Regarding Question 2 option E
Passage states that about one-third of the total output of consumer goods is attributable to the use of capital goods. So, the remaining two-third or a part of the remaining two-third can be attributed to the workers. We have no information to find this out. So, it is possible that whole of the remaining two-third can be attributed to the workers. In this case, the workers are not receiving a share that is greater than the value of their labor.
Also, I don't remember reading anything about overestimation of contribution of workers.
So, option E cannot be the answer.

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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 06 Aug 2018, 09:30
Hi workout nightblade354 GMATNinja KarishmaB

Can anyone explain me RC00141-02?
I am too confused with ratio and numbers or may
be I am too caught up in details!!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 06 Aug 2018, 19:46
adkikani wrote:
Hi workout nightblade354 GMATNinja KarishmaB

Can anyone explain me RC00141-02?
I am too confused with ratio and numbers or may
be I am too caught up in details!!


Hey adkikani

I interpreted the answer using the following lines

Quote:
In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods. Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like.


attributable to the use of capital goods = one-third of the total output
Approximately two-thirds of total output is paid out to workers as wages and salaries
Remaining third serves as compensation to the owners of the capital goods.
Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries

So, owners of the capital goods receive a little less than one third of total output of consumer goods is attributable to the use of capital goods and option C echoes this.

I hope that helped. Let me know.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 07 Aug 2018, 20:26
2
adkikani wrote:
Hi workout nightblade354 GMATNinja KarishmaB

Can anyone explain me RC00141-02?
I am too confused with ratio and numbers or may
be I am too caught up in details!!


Hi adkikani,

Here's my take on this specific question -

(A) Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output. Its the opposite, we are told that about 2/3 of the income from total output is paid out to workers - Incorrect
(B) Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods. Its again the opposite,owners receive 1/3 of the share attributed to the income from total output because of capital goods
(C) Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods. - Safer,generalized option - which states no greater than the total output - keep it - In line with the passage
(D) 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. - Irrelevant
(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. - Irrelevant - labor theory overestimates in the sense that it disregards the contribution of capital goods, not in terms of the share of the income specifically to workers. may be this overestimation is because of the other factor,who knows what

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

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New post 09 Aug 2018, 21:36
1
adkikani wrote:
Hi workout nightblade354 GMATNinja KarishmaB

Can anyone explain me RC00141-02?
I am too confused with ratio and numbers or may
be I am too caught up in details!!


Notice this in the passage:
" In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods. "

1/3rd of output is attributable to use of capital goods.
1/3rd of income is given to the owners of the capital goods.

(C) says "Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods."

It matches what the passage says. Share of income is no greater than the proportion of total output.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99 &nbs [#permalink] 09 Aug 2018, 21:36
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