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# Technological improvements and reduced equipment costs have

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Senior Manager
Joined: 07 Jan 2008
Posts: 399
Technological improvements and reduced equipment costs have [#permalink]

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08 May 2008, 12:34
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Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.

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 in the cost of solar-power equipment has occurred despite increased raw material costs
for that equipment.
(C) Technological changes have increased the efficiency of oil-fired power plants.
(D) Most electricity is generated by coal-fired 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.

----------

Director
Joined: 26 Jul 2007
Posts: 535
Schools: Stern, McCombs, Marshall, Wharton
Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 12:55
Premise:
Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade.

Conclusion:
However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.

Solar power has become cheaper but it has not changed it's economic vitality as compared to oil fired power plants.

So oil fired power plants must be getting cheaper as well.

(C) Technological changes have increased the efficiency of oil-fired power plants.
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Posts: 202
Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 13:00
C. The threshold of economic viability is dependent on new oil fired power plants. If the technological changes have also increased the efficiency of the oil fired power plants as C states, then the relationship between new solar power plants and new oil fired power plants will remain constant -- therefore, if they are both becoming more cost efficient then the threshold remains relatively the same.
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 13:11
lexis wrote:
Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.

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 in the cost of solar-power equipment has occurred despite increased raw material costs
for that equipment.
(C) Technological changes have increased the efficiency of oil-fired power plants.
(D) Most electricity is generated by coal-fired 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.
.

I will go with C.

Improvements in solar power generation have occurred at the same time as oil-fired generation plants.
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Joined: 28 Apr 2008
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 13:14
lexis wrote:
Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars.

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.
>> Irrelevant.
(B) The reduction in the cost of solar-power equipment has occurred despite increased raw material costs
for that equipment.
>> Irrelevant. We are interested in why cost efficiency has not decreased economic viability.
(C) Technological changes have increased the efficiency of oil-fired power plants.
?

(D) Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants.
>> Irrelevant.
(E) When the price of oil increases, reserves of oil not previously worth exploiting become econ
omically viable.
>> Irrelevant.

----------

Director
Joined: 06 Jan 2008
Posts: 546
Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 13:31
1
KUDOS
Technology made S efficient, but not as efficient as O.Why?
May be Technology is making O efficient at the same time. (OR)
May be price of O is decreasing.

A - Great! it says cost of oil decreased.So this must be the reason.But wait,the premise said 'price per barrel to which...'is unchanged.
(If cost of oil decreased then 'price per barrel to which...' should INCREASE.) OUT.
C - Bingo! Technology is making O efficient. C for me.
Rest of the choices out of scope.
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 15:45
C
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 17:07
C it is. You only want to use solar energy if it's more cost-effective relative to oil-powered energy. While it's true that solar power became more efficient, the parallel increase in efficiency of oil-powered energy does not give solar power any comparative advantage.
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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08 May 2008, 19:30
1
KUDOS
Thanks for all!
In first time, I could not understand why price per barrel would has to rise. Well, because it is the premise given by author. The paradox, here, is more cost-efficient than last decade but not enough to compete with oil-fired energy.

C helps solve this discrepancy!
Thanks!!!
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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21 Jul 2010, 11:06
Whats wrong with A?
Thanks,
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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01 Aug 2010, 08:25
Well, this Q is really playing hide the ball... I would have surely have gone with A on test day!

In C - we don't know by how much the efficiency of oil-fired plants has improved --- lets say its just a negligible .0002% but the price of oil has tanked to like a dollar a barrel --- while solar power efficiency has increased in the last decade by say 2000% then oil-fired plants would only be viable on account of the really cheap price of oil well below the point of eco viability (\$36)

A doesn't say to what levels the price of oil has tanked but even C doesn't say how the increases in efficiencies of oil-fired plants and solar power plants compare... So I am really not sure how one can reject A...
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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01 Aug 2010, 09:40
gmat1011 wrote:
Well, this Q is really playing hide the ball... I would have surely have gone with A on test day!

In C - we don't know by how much the efficiency of oil-fired plants has improved --- lets say its just a negligible .0002% but the price of oil has tanked to like a dollar a barrel --- while solar power efficiency has increased in the last decade by say 2000% then oil-fired plants would only be viable on account of the really cheap price of oil well below the point of eco viability (\$36)

A doesn't say to what levels the price of oil has tanked but even C doesn't say how the increases in efficiencies of oil-fired plants and solar power plants compare... So I am really not sure how one can reject A...

Actually A says that the prices has fallen dramatically., whereas in C the increased efficiency of oil-fired power plants, as you have already mentioned, could be negligible.

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Re: CR: Solar energy vs fossil fnergy [#permalink]

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03 Jan 2011, 11:58
nobody is going to clarify this?

noboru wrote:
gmat1011 wrote:
Well, this Q is really playing hide the ball... I would have surely have gone with A on test day!

In C - we don't know by how much the efficiency of oil-fired plants has improved --- lets say its just a negligible .0002% but the price of oil has tanked to like a dollar a barrel --- while solar power efficiency has increased in the last decade by say 2000% then oil-fired plants would only be viable on account of the really cheap price of oil well below the point of eco viability (\$36)

A doesn't say to what levels the price of oil has tanked but even C doesn't say how the increases in efficiencies of oil-fired plants and solar power plants compare... So I am really not sure how one can reject A...

Actually A says that the prices has fallen dramatically., whereas in C the increased efficiency of oil-fired power plants, as you have already mentioned, could be negligible.

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Re: CR: Solar energy vs fossil fnergy [#permalink]

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04 Jan 2011, 05:31
Can You Pls quote the source ?
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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04 Jan 2011, 16:31
1
KUDOS
mundasingh123 wrote:
Can You Pls quote the source ?

Also, GMATPrep.
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Re: CR: Solar energy vs fossil fnergy [#permalink]

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05 Jan 2011, 05:53
Lexis,it would help if u could tag the source in your subsequent posts,Thanks
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Re: CR: Solar energy vs fossil fnergy   [#permalink] 05 Jan 2011, 05:53
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