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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, 23:19
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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.

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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 24 Dec 2017, 00:00
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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, 23:47
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]

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New post 20 Feb 2018, 00:28
chetan2u wrote:
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 %.

Hi Chetan2u. Nice explanation. But what is wrong with option A ?
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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 20 Feb 2018, 18:19
RanjanSury wrote:
chetan2u wrote:
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 %.

Hi Chetan2u. Nice explanation. But what is wrong with option A ?


Hi ,

Option A is ambiguous as it does not give anything substantial to infer.
We can say that the many folks have been laid off but that does not mean that they can not do business and increase their spending .
Also we can not infer rising per capita income from A
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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 21 Feb 2018, 06:42
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 %.[/quote]
Hi Chetan2u. Nice explanation. But what is wrong with option A ?[/quote]

Hi ,

Option A is ambiguous as it does not give anything substantial to infer.
We can say that the many folks have been laid off but that does not mean that they can not do business and increase their spending .
Also we can not infer rising per capita income from A[/quote]

Thanks Arvind910619. That helps.
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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 30 Jul 2018, 02:49
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.



KAPLAN OFFICIAL SOLUTION:



Correct Choice: (B)

Individual income went up, but household income went down. A possible explanation is that the number of individuals per household declined. Choice (B) states exactly this, and is therefore the best answer.

Choices (A) and (C) both address factors that could change income levels, but neither can explain the simultaneous decline in household income and rise n personal income. Choice (D) doesn’t address income at all. Choice (E) suggests that other states experienced the same phenomenon, but doesn’t explain it.
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