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18 Dec 2018, 02:50
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
67% (02:06) correct
33%
(02:16)
wrong
based on 2173
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Some analysts maintain that an embargo by country Litora on the export of a strategic metal to country Zenda, if imposed, would drive up the price of the metal in Zenda at least tenfold. They note that few other countries export the metal and that, with an embargo, Zenda might have to depend on as-yet-unexploited domestic sources of the metal.
Which of the following, if true, constitutes the most serious objection to the analysis above?
(A) Litora’s economy depends heavily on foreign currency earned by the export of the strategic metal to other countries.
(B) There are foreign-policy steps that Zenda could take to appease Litora and avoid being subjected to an embargo on the metal.
(C) Geologists believe that additional deposits of the metal could possibly be found within the territory of Litora.
(D) Only a small proportion of Zenda’s import expenditures is devoted to the import of the metal from Litora.
(E) In case of an embargo, Zenda could buy the metal indirectly from Litora on the world market at a less than one-third increase in cost.
Which of the following, if true, constitutes the most serious objection to the analysis above?
(A) Litora’s economy depends heavily on foreign currency earned by the export of the strategic metal to other countries.
(B) There are foreign-policy steps that Zenda could take to appease Litora and avoid being subjected to an embargo on the metal.
(C) Geologists believe that additional deposits of the metal could possibly be found within the territory of Litora.
(D) Only a small proportion of Zenda’s import expenditures is devoted to the import of the metal from Litora.
(E) In case of an embargo, Zenda could buy the metal indirectly from Litora on the world market at a less than one-third increase in cost.
05 May 2024, 13:57
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Hi! First contribution ever in the club so I hope you like it!
The passage states that if Litora imposes an embargo on the export of a strategic metal to Zenda, the price of that metal would at least tenfold (old price*10 or more). The reason for that conclusion is that few other countries export the metal and that Zenda might have to look into its unexplored domestic market to get sources of the metal.
The question then, asks for the most serious objection to the analysis (i.e, we're looking for a weakener)
A) IMO it's out of scope, as it focuses on a potential impact on Litora's economy rather than Zenda's. Eliminate it.
B) It can certainly help if Zenda could take some diplomatic steps to avoid the embargo, but for me, the outcome is not very clear (Litora could either revisit their position or politely tell Zenda to explore other options). Remember that we're looking for the MOST serious objection. Personally, I'd keep it with serious reservations and look for stronger options.
C) Again, this refers to Litora when we're trying to analyze the impact of the embargo from Zenda's POV, but it would not be an objection in any case. If Litora has even more resources of that metal, that could translate into more market power that would not benefit Zenda. Eliminate it.
D) It compares Zenda's export of this metal to its total exports, which would be relevant if the question was about the embargo's impact on Zenda's economy. It doesn't necessarilly object or undermine the possibility that the embargo will make the price of the metal to at least tenfold. Eliminate it.
E) It says that if there's an embargo, Zenda can get the resource from the world market at less than 1/3 increase in cost so clearly the price of that metal would not tenfold if there's an embargo. Therefore, choice E is the right answer.
The passage states that if Litora imposes an embargo on the export of a strategic metal to Zenda, the price of that metal would at least tenfold (old price*10 or more). The reason for that conclusion is that few other countries export the metal and that Zenda might have to look into its unexplored domestic market to get sources of the metal.
The question then, asks for the most serious objection to the analysis (i.e, we're looking for a weakener)
A) IMO it's out of scope, as it focuses on a potential impact on Litora's economy rather than Zenda's. Eliminate it.
B) It can certainly help if Zenda could take some diplomatic steps to avoid the embargo, but for me, the outcome is not very clear (Litora could either revisit their position or politely tell Zenda to explore other options). Remember that we're looking for the MOST serious objection. Personally, I'd keep it with serious reservations and look for stronger options.
C) Again, this refers to Litora when we're trying to analyze the impact of the embargo from Zenda's POV, but it would not be an objection in any case. If Litora has even more resources of that metal, that could translate into more market power that would not benefit Zenda. Eliminate it.
D) It compares Zenda's export of this metal to its total exports, which would be relevant if the question was about the embargo's impact on Zenda's economy. It doesn't necessarilly object or undermine the possibility that the embargo will make the price of the metal to at least tenfold. Eliminate it.
E) It says that if there's an embargo, Zenda can get the resource from the world market at less than 1/3 increase in cost so clearly the price of that metal would not tenfold if there's an embargo. Therefore, choice E is the right answer.
General Discussion
18 Dec 2018, 22:40
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IMO E
Since the argument is about Litora not exporting metal to Zennada "directly", Z can still buy metal from L using indirect open market methods. This will also decrease the cost or cost Z cheaper than the previous arrangement between both countries.
Since the argument is about Litora not exporting metal to Zennada "directly", Z can still buy metal from L using indirect open market methods. This will also decrease the cost or cost Z cheaper than the previous arrangement between both countries.
