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Technological improvements and reduced equipment costs have

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Director
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Technological improvements and reduced equipment costs have [#permalink]

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New post 15 Feb 2009, 22:08
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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-tired, power plants.
(E) When the price of oil increases, reserves of oil not previously worth exploiting become economically viable.

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Manager
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Re: CR: Technological improvements [#permalink]

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New post 15 Feb 2009, 23:07
reply2spg 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.
Out of scope.
(C) Technological changes have increased the efficiency of oil-fired power plants.
Hold it.
(D) Most electricity is generated by coal-fired or nuclear, rather than oil-tired, power plants.
Doesn't make any difference to the argument here.

(E) When the price of oil increases, reserves of oil not previously worth exploiting become economically viable.
Yes, but but doen't really explain why the price of oil might differ for this reason.

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Senior Manager
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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 04:05
I went for C.

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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 04:48
my choice is C though I dnt find any reason to reject A. Can sum 1 throw light on this?

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Director
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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 06:31
ritula wrote:
my choice is C though I dnt find any reason to reject A. Can sum 1 throw light on this?


IMO, A is wrong because 'the threshold of economic viability for solar power is unchanged at thirty-five dollars.'
if threshold is unchanged, something other than drop in price of oil should have happened.

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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 09:10
I'll still go with A

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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 09:57
yes that is a valid point
alpha_plus_gamma wrote:
ritula wrote:
my choice is C though I dnt find any reason to reject A. Can sum 1 throw light on this?


IMO, A is wrong because 'the threshold of economic viability for solar power is unchanged at thirty-five dollars.'
if threshold is unchanged, something other than drop in price of oil should have happened.

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Re: CR: Technological improvements [#permalink]

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New post 16 Feb 2009, 10:26
ritula wrote:
my choice is C though I dnt find any reason to reject A. Can sum 1 throw light on this?



The threshold of economic viability is 35 dollars; this is true regardless of whether oil prices rise or fall. The oil prices have to rise above 35 dollars for solar to become economically viable regardless of the improvement in efficiency of solar as a technology.

I eliminated all the other choices and went for C.

A is not valid since the price of oil is one thing but it does not impact the threshold mentioned in the question statement.
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Re: CR: Technological improvements   [#permalink] 16 Feb 2009, 10:26
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