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# Technological improvements and reduced equipment costs have

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VP
Joined: 17 Jun 2008
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Technological improvements and reduced equipment costs have [#permalink]

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11 Aug 2008, 00:14
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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.
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Senior Manager
Joined: 06 Apr 2008
Posts: 429

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Re: cr-tough one [#permalink]

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11 Aug 2008, 00:39
spriya 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.

A) -> Does support since falling oil will mean oil-plants are economical
B) -> Does not support
C) -> Does support
D) -> Out of place
E) -> Does not support since exploiting oil reserves is different than using oil.

Between A) and C) I will go with C) since it explains that Technological changes have also increased effeciency in oil plants in same way as solar.

Its tough one though

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Director
Joined: 14 Aug 2007
Posts: 726

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Re: cr-tough one [#permalink]

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11 Aug 2008, 00:51
spriya 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.

C should be the answer.

The threshold is constant.

If the cost effieciency of solar energy has increased, same must be the case for oil production (in order to keep the threshol constant)

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Intern
Joined: 19 May 2007
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Re: cr-tough one [#permalink]

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11 Aug 2008, 00:54
A

'Dramatic' fall in oil prices helps 'most' to explain the economic viability

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VP
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Re: cr-tough one [#permalink]

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11 Aug 2008, 00:59
nmohindru wrote:
spriya 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.

A) -> Does support since falling oil will mean oil-plants are economical
B) -> Does not support
C) -> Does support
D) -> Out of place
E) -> Does not support since exploiting oil reserves is different than using oil.

Between A) and C) I will go with C) since it explains that Technological changes have also increased effeciency in oil plants in same way as solar.

Its tough one though

yeps !!even i had ended up with A,C but selected C .Actually A calls fo increased economic viability lesser the price more the viability.
hence for stable scenario,tech innovations affect both solar and oil equally.
Now im clear !! thanku all
great discussion

OA is C
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Re: cr-tough one   [#permalink] 11 Aug 2008, 00:59
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# Technological improvements and reduced equipment costs have

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