Studies in restaurants show that the tips left by customers : GMAT Critical Reasoning (CR)
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# Studies in restaurants show that the tips left by customers

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Studies in restaurants show that the tips left by customers [#permalink]

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05 Jun 2006, 20:53
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Studies in restaurants show that the tips left by customers who pay their bill in cash tend to be larger when the bill is presented on a tray that bears a credit-card logo. Consumer psychologists hypothesize that simply seeing a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their spending power exceeds the cash they have immediately available.

Which of the following, if true, most strongly supports the psychologistsâ€™ interpretation of the studies?

A. The effect noted in the studies is not limited to patrons who have credit cards.
B. Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented with a restaurant bill on a tray with credit-card logo than when the tray has no logo.
C. In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards.
D. In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card.
E. The percentage of restaurant bills paid with given brand of credit card increases when that credit cardâ€™s logo is displayed on the tray with which the bill is prepared.
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05 Jun 2006, 21:31
Go with B. If the patrons are under financial pressure from their credit-card obligations, then it means their spending power no longer exceeds the cash they have immediately available. So if they tip less, then the conclusion made by the psychologists is true.
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05 Jun 2006, 21:36
A tough .. none of the choices look upto mark ... still I'll go with E .. by POE ..
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06 Jun 2006, 04:41
B is the only choice that relates to what the studies show ... effect of visual of credit card logo on payment patterns.
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06 Jun 2006, 09:14
I'll go with B as well from POE.
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19 Jun 2006, 14:14
Studies in restaurants show that the tips left by customers who pay their bill in cash tend to be larger when the bill is presented on a tray that bears a credit-card logo. Consumer psychologists hypothesize that simply seeing a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their spending power exceeds the cash they have immediately available.

Which of the following, if true, most strongly supports the psychologistsâ€™ interpretation of the studies?

A. The effect noted in the studies is not limited to patrons who have credit cards.
B. Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented with a restaurant bill on a tray with credit-card logo than when the tray has no logo.
C. In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards.
D. In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card.
E. The percentage of restaurant bills paid with given brand of credit card increases when that credit cardâ€™s logo is displayed on the tray with which the bill is prepared.

We need to find something that supports: "simply seeing a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their spending power exceeds the cash they have immediately available."

A, C and D are irrelevant, IMO.

Since we are all discussing B, I'm not sure how it can be true since the presence of the credit card logo makes the person want to spend LESS, instead of more. I don't think it helps the hypothesis.

In the case of E, people who saw the credit card logo were more inclined to pay with the credit card matching the logo, so its certainly better than B.
19 Jun 2006, 14:14
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