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# The consumer price index is a measure that detects monthly

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The consumer price index is a measure that detects monthly [#permalink]

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29 Jun 2011, 18:38
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Question Stats:

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The consumer price index is a measure that detects monthly changes in the retail prices of goods and services, The payment of some government retirement benefits is based on the consumer price index so that those benefits reflect the change-in the cost of living as the index changes. However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index
(B) fails to make explicit which goods and services are included in the consumer price index
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods
(D) uncritically draws an inference from what has been true in the past to what will be true in the future
(E) makes an irrelevant shift from discussing retail prices to discussing production costs

[Reveal] Spoiler: OE
The author draws his conclusion by drawing what he takes to be a telling distinction between the
CPI’s measure of the price of goods sold, and the innovations that can reduce the cost of goods produced.
But these are two different things, and so the conclusion based on this distinction is utterly unwarranted.
Even if all the economic jargon blurred the author’s scope shift, perhaps reasoning backward from (E)’s
wording would have made that scope shift stand out.
The author commits a scope shift, but the four wrong answers simply go beyond the scope. The
conclusion has to do with “sometime” differences in the value of government benefits, so (A)’s suggestion
that those differences might not occur is useless. As described to us, the CPI isn’t measured, or used, any
differently depending on which goods and services are involved, so (B) is off topic too. (C) ventures into
the area of retiree purchasing behavior—it’s never mentioned, just as (D)’s appeal to the future vs. the past
never comes up in the argument.
[Reveal] Spoiler: OA

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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01 Jul 2011, 06:34
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Great question. Here is my attempt.

Evidence: benefits increase as cpi increase
cpi increase as retail price increase
cost of living increase as retail price increase
cpi does not change as cost of producing some goods reduces

claim: benefits reduce less than the reduction in production costs

Assumption: production costs and retail prices are related somehow

Answer E makes most sense, since the author jumped to costs wihout mentioning a relationship between costs and retail prices.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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29 Jun 2011, 19:41
fluke wrote:
The consumer price index is a measure that detects monthly changes in the retail prices of goods and services, The payment of some government retirement benefits is based on the consumer price index so that those benefits reflect the change-in the cost of living as the index changes. However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index
(B) fails to make explicit which goods and services are included in the consumer price index
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods
(D) uncritically draws an inference from what has been true in the past to what will be true in the future
(E) makes an irrelevant shift from discussing retail prices to discussing production costs

D for me.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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30 Jun 2011, 12:37
IMO E. OA plz.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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30 Jun 2011, 18:52
E for me.

The conclusion is not about the future. It is a general statement that can refer to past, present or future. So we can eliminate D.

Crick

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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30 Jun 2011, 19:28
"the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods."

Kindly help me know what is the irrelevant shift in relation btw consumer price index and cost of producing goods

I thought technological innovations apply to future products and govt will benifit in future with lesser cost of production...

Kindly help me with OE for A and D

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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30 Jun 2011, 20:39
what is the OA?

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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01 Jul 2011, 02:45
Hmm, not an easy one. Thanks for posting.

IMO E. not a very clear cut tho, its the only one i can relate to.

OA when u can Fluke.

thanks.
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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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01 Jul 2011, 03:29
Answers should be E . govt retire benefits relate to cost of living index- which relates to everyday retail prices so that an increase/decrease in them can be taken into account, author thinks this is wrong because technology reducing cost of prod is not taken into account. the only way this can lead to more money being paid as benefit is when the cost being low directly translates into the prices being low too. author is auuming this is the case. hence E The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index : So what? author is only saying that in the years when the cost of prod is low, and CPI doesnt accomodate it, it is leading to unfairly high payment.
(B) fails to make explicit which goods and services are included in the consumer price index : that is not important, agument is accepting that it includes representative items.
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods : this is more a criticism of the govt using CPI to modify the retirement benefits, then a criticism of the author's conclusion.
(D) uncritically draws an inference from what has been true in the past to what will be true in the future : we cant blame an author if he uses a trend!
(E) makes an irrelevant shift from discussing retail prices to discussing production costs: correct option

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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01 Jul 2011, 20:25
E...

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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16 Sep 2011, 01:47
IMO E
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-------Analyze why option A in SC wrong-------

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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16 Sep 2011, 15:53
I picked E...the index measures retail prices not production costs.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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16 Sep 2011, 19:31
Definitely a straight E for me.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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18 Sep 2011, 02:15
D

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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27 Sep 2011, 09:55
fluke wrote:
The consumer price index is a measure that detects monthly changes in the retail prices of goods and services, The payment of some government retirement benefits is based on the consumer price index so that those benefits reflect the change-in the cost of living as the index changes. However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index
(B) fails to make explicit which goods and services are included in the consumer price index
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods
(D) uncritically draws an inference from what has been true in the past to what will be true in the future
(E) makes an irrelevant shift from discussing retail prices to discussing production costs

[Reveal] Spoiler: OE
The author draws his conclusion by drawing what he takes to be a telling distinction between the
CPI’s measure of the price of goods sold, and the innovations that can reduce the cost of goods produced.
But these are two different things, and so the conclusion based on this distinction is utterly unwarranted.
Even if all the economic jargon blurred the author’s scope shift, perhaps reasoning backward from (E)’s
wording would have made that scope shift stand out.
The author commits a scope shift, but the four wrong answers simply go beyond the scope. The
conclusion has to do with “sometime” differences in the value of government benefits, so (A)’s suggestion
that those differences might not occur is useless. As described to us, the CPI isn’t measured, or used, any
differently depending on which goods and services are involved, so (B) is off topic too. (C) ventures into
the area of retiree purchasing behavior—it’s never mentioned, just as (D)’s appeal to the future vs. the past
never comes up in the argument.

Great question.
Flaw - consumer price index, used for retail, is used for government benefits.
_________________

Thanks and Regards,
GM.

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Re: Consumer Price Index, Retail prices And Retirement Benefits [#permalink]

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27 Sep 2011, 14:17
I shortlisted A and D...and later chose D...

However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index -some what yes..But out of the discussion

(B) fails to make explicit which goods and services are included in the consumer price index

(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods

(D) uncritically draws an inference from what has been true in the past to what will be true in the future -To me this refers to future innovation that Price index will miss

(E) makes an irrelevant shift from discussing retail prices to discussing production costs

correct me if i am wrong....
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Re: The consumer price index is a measure that detects monthly [#permalink]

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07 Mar 2015, 14:47
Hello from the GMAT Club VerbalBot!

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Re: The consumer price index is a measure that detects monthly [#permalink]

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11 Mar 2015, 09:34
The relationship between production cost and CPI is not clear, which is the flaw in the argument.
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Re: The consumer price index is a measure that detects monthly [#permalink]

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13 Oct 2016, 03:09
Hello from the GMAT Club VerbalBot!

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Re: The consumer price index is a measure that detects monthly   [#permalink] 13 Oct 2016, 03:09
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