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Studies in restaurants show that the tips left by customers

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

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02 Dec 2009, 12:15
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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 psychologists' interpretation of the studies?
(A) The effect noted in the studies is not limited to patrons who have credit cards.
(8) 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 a 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 a given brand of credit card increases when that credit card's
logo is displayed on the tray with which the bill is presented.
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02 Dec 2009, 12:21
This is a tough one. I'm btw A and B. Going to go with B.
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02 Dec 2009, 12:27
Seems that (A) would weaken as one wouldn't expect an effect on people w/o credit cards.

(C) would weaken since the guests didn't have credit cards and so wouldn't be affected by the logo.

(D) This doesn't speak to the logo vs. no logo directly so it's irrelevant.

(E) The stimulus doesn't refer to cardholders spending money only when they see their own card logo.

Looks like it's (B) because credit cardholders under financial pressure wouldn't have much spending power and thus, would be inclined to tip less.

Does this seem logical?
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02 Dec 2009, 12:50
OA B

This question is from OG 12..though i did understand the argument properly, but found the answer choices tough.
I got to B by using POE...can anyone throw some more light on this answer choice as the official explanation is pathetic
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02 Dec 2009, 14:51
The conclusion that consumer psychologists draw is 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. Therefore, the argument depends on the fact the logo reminds credit card holders of their credit card and the spending power attached to having a credit card.

B works because it depends on the same premise, that credit hard holders see the logo and are reminded of their spending power. Except, in this case they are reminded of their lack of spending power due to the restrictions placed on their credit card. The connection between seeing the logo and the mental connection to spending power of the credit card is supported if B is true.
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03 Dec 2009, 01:15
B all the way
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03 Dec 2009, 02:25
I think it's not common for GMAT.

We have:
People feel more money power ==> more tips

Support:
People feel less money power ==> less tips

In other words,

we have:
if more A then more B

Support:
if less A then less B

Not very convinced support.
Anyway, I agree, B is the best here.

11MBA wrote:
The conclusion that consumer psychologists draw is 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. Therefore, the argument depends on the fact the logo reminds credit card holders of their credit card and the spending power attached to having a credit card.

B works because it depends on the same premise, that credit hard holders see the logo and are reminded of their spending power. Except, in this case they are reminded of their lack of spending power due to the restrictions placed on their credit card. The connection between seeing the logo and the mental connection to spending power of the credit card is supported if B is true.
Re: Confusing CR   [#permalink] 03 Dec 2009, 02:25
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