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Technological improvements and reduced equipment costs have

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Senior Manager
Joined: 19 Oct 2004
Posts: 315
Location: Missouri, USA
Technological improvements and reduced equipment costs have [#permalink]

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04 Nov 2004, 06:11
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Technological improvements and reduced equipment costs have made converting solar energy directly into electricity power more cost- defficient in the last decade. However the threshold of economic viability for solar power, (that is, the price fper barrel to which oil should have to rise in order for new solar power plants to be more economical than new oil fired power plants)is unchanged at \$35.

Which of the following , if true, does most to help explain why the increased cost- efficiency of solar power has not decreased its threshold of economic viability?

A. The cost of oil has fallen dramatically .

B. The reduction of cost of solar power equipment has occured despite increased raw material cost for that equipment.

C. Technological changes have increased the efficiency of oil- fired power plants.

D. Most electricity is generated by coal, fire or nuclear rather than oil fired power plants.

E. When the price of oil increases, reserves of oil not previously worth exploiting become economically viable.
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Senior Manager
Joined: 21 Jun 2004
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04 Nov 2004, 10:54
I'll vote for C.

Quote:
C. Technological changes have increased the efficiency of oil- fired power plants.

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Senior Manager
Joined: 19 Oct 2004
Posts: 315
Location: Missouri, USA

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06 Nov 2004, 09:46
the OA is C. Can anyone please explain it to me??
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Manager
Joined: 18 Sep 2004
Posts: 64

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06 Nov 2004, 22:43
"A" talks about cost but nothing about price of oil. That's why it is wrong.
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Aspire

Intern
Joined: 29 Aug 2004
Posts: 12

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06 Nov 2004, 23:12
I'll give it a shot.

A. The cost of oil has fallen dramatically.

The price of oil should have changed but didn't, that's what the last sentence tells us so this can't be the reason.

B. The reduction of cost of solar power equipment has occured despite increased raw material cost for that equipment.

Outside the scope of the argument, is also pretty much irrelevant since the cost of actual equipment has gone down regardless of the raw material cost.

C. Technological changes have increased the efficiency of oil- fired power plants.

Well, this would explain why people keep using oil. The tech advances with solar power are rendered useless for its economic vialibility because the tech advances in oil keep it the popular form of energy and economically viable when the price remains unchanged.

D. Most electricity is generated by coal, fire or nuclear rather than oil fired power plants.

Doesn't explain why solar's economic viability hasn't approached oil's.

E. When the price of oil increases, reserves of oil not previously worth exploiting become economically viable.

Doesn't really deal with the evidence and isn't really a relevant argument ... economically, the reserves of oil are ALWAYS worth exploiting but that is beyond the scope of this particular argument.

I choose C because it's the least weakest answer.
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Joined: 16 Jun 2004
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07 Nov 2004, 00:48
1. Did anything else influence such discrepancy? In this case, yes, the oil thing also had an increased efficiency thereby making solar power still unattractive.

2. Is the comparisons's right or is the proportions right? You'll see number of questions on price decrease but sales decrease instead of increase OR population increase but number of percent men decreased instead of increase etc.
07 Nov 2004, 00:48
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