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The annual per capita income in State A rose from 1995 to 2000. During

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The annual per capita income in State A rose from 1995 to 2000. During [#permalink]

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New post 23 Dec 2017, 22:19
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Question Stats:

55% (01:11) correct 45% (01:30) wrong based on 96 sessions

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The annual per capita income in State A rose from 1995 to 2000. During the same time period, the average annual household income in State A fell by more than three percent.

Which of the following, if true, would best explain the discrepancy above?

A. The industries that were the greatest employers in State A prior to 1995 laid off much of their work force in the 1995-2000 period.
B. Due to divorce, a lowered birth rate, and other factors, the average number of individuals per household in State A declined from 1995 to 2000.
C. The software industry, which provides relatively few jobs at a relatively high payscale, grew rapidly in State A from 1995 to 2000.
D. During the late 1990's, the state government in State A drastically reduced property taxes.
E. States adjacent to State A also had simultaneous increases in per capita income and decreases in average household income in the 1995-2000 period.
[Reveal] Spoiler: OA

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Re: The annual per capita income in State A rose from 1995 to 2000. During [#permalink]

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New post 23 Dec 2017, 23:00
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SSSNW wrote:
The annual per capita income in State A rose from 1995 to 2000. During the same time period, the average annual household income in State A fell by more than three percent.

Which of the following, if true, would best explain the discrepancy above?

A. The industries that were the greatest employers in State A prior to 1995 laid off much of their work force in the 1995-2000 period.
B. Due to divorce, a lowered birth rate, and other factors, the average number of individuals per household in State A declined from 1995 to 2000.
C. The software industry, which provides relatively few jobs at a relatively high payscale, grew rapidly in State A from 1995 to 2000.
D. During the late 1990's, the state government in State A drastically reduced property taxes.
E. States adjacent to State A also had simultaneous increases in per capita income and decreases in average household income in the 1995-2000 period.



hi..

two facts :-
1) income per person has increased
2) income per group of the same person has decreased


ONLY reason that the group has gone smaller

lets see the choices that tells us so or gives a similar/another logic for decrease in group inspite of increase in each members increase

B gives us the same reason of decrease in members per group..
say each member income has grown from 100 to 130..
so each household when consisted of 4 members had average income of 400
Now with household decreased to 3 person will have an average income of 3*130 = 390 so reduced by approx 3 %.
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Re: The annual per capita income in State A rose from 1995 to 2000. During [#permalink]

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New post 25 Dec 2017, 22:47
gmatFalcon wrote:
The annual per capita income in State A rose from 1995 to 2000. During the same time period, the average annual household income in State A fell by more than three percent.

Which of the following, if true, would best explain the discrepancy above?

A. The industries that were the greatest employers in State A prior to 1995 laid off much of their work force in the 1995-2000 period.
B. Due to divorce, a lowered birth rate, and other factors, the average number of individuals per household in State A declined from 1995 to 2000.
C. The software industry, which provides relatively few jobs at a relatively high payscale, grew rapidly in State A from 1995 to 2000.
D. During the late 1990's, the state government in State A drastically reduced property taxes.
E. States adjacent to State A also had simultaneous increases in per capita income and decreases in average household income in the 1995-2000 period.


The answer is B
We can safely drop all other choices except C .
So let us analyse C
The software industry, which provides relatively few jobs at a relatively high payscale, grew rapidly in State A from 1995 to 2000.
Now this offers that the income of very few folks increased substantially and the industry also grew rapidly , if this the case the then the annual household income should have increased but it dropped by 3 percent .So leave this choice.

B is correct as wee can see that the number of people in the house decreased sue to various factors thus reducing the income . But they may have found other high paying jobs thus increase in per ca-pita income
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Re: The annual per capita income in State A rose from 1995 to 2000. During   [#permalink] 25 Dec 2017, 22:47
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