conclusion: it is still cheaper for a company to import sport shoes from Macao to the Philippines than to manufacture sports shoes in the Philippines.

IMO C: The tariff on sports shoes imported from Macao to the Philippines is less than 25% of the cost of manufacturing sports shoes in the Philippines.

The cost of manufacturing sports shoes in Macao is 25% less than the cost of manufacturing them in the Philippines. Even after transportation fees and tariff charges are added, it is still cheaper for a company to import sport shoes from Macao to the Philippines than to manufacture sports shoes in the Philippines.

The statements above, if true, best support which of the following assertions?

A. Labor costs in Macao are 25% below those in the Philippines.
B. Importing sports shoes from Macao to the Philippines will eliminate 25% of the manufacturing jobs in the Philippines.
C. The tariff on sports shoes imported from Macao to the Philippines is less than 25% of the cost of manufacturing sports shoes in the Philippines.
D. The fee for transporting a pair of sports shoes from Macao to the Philippines is more than 25% of cost of manufacturing the shoes in Macao.
E. It takes 25% less time to manufacture a pair of sports shoes in Macao than it does in the Philippines

* Before adding Transportation fee & tariff:
Cost of import from M = 75% Cost of manufacturing in P
* After adding Transportation fee & tariff:
Cost of import from M = (75% Cost of manufacturing in P + fee&tariff) < Cost of manufacturing in P
=> fee&tariff < 25% Cost of manufacturing in P
=> I think (C)

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Cost of manufacturing is 25% lesser in Macau than in Philippines. Even after adding transportation and tariffs, it is still cheaper to import from Macau than to buy from Philippines. This means that the sum of cost of transportation and tariffs is lesser than 25 percent of the cost of the product.

Therefore the best answer is C.

The right answer is option C.

Premise 1: The cost of manufacturing sports shoes is 25% less in Macao than the cost of manufacturing them in the Philippines.
Premise 2: Even if tariffs and transportation costs are added, it is cheaper for a company to import sports shoes from Macao to the Philippines than to manufacture sports shoes in the Philippines.

We are to determine which of the answer choices that the statements above if true supports.

Option A: Labor costs in Macao are 25% below those in the Philippines.
This is out of scope. The statements above do not make any reference of any sort to the cost of labor. Several factors can affect the manufacturing cost of which cost of labor is a part. The fact that it costs less to manufacture sports shoes in Macao does not automatically mean that labor costs in Macao are less than those in the Philippines by 25%. It could be that manufacturing costs are low because raw materials are cheaper. We can, therefore, eliminate option A.

Option B: Importing sports shoes from Macao to the Philippines will eliminate 25% of the manufacturing jobs in the Philippines.
This is irrelevant. Granted that the importation of sports shoes from Macao to the Philippines will lead to a reduction in manufacturing jobs. How does the information above correlate with the percentage of manufacturing jobs that will be lost in the Philippines? It might lead to 1%, 15%, 25%, 35%, or even 0% manufacturing job losses. We cannot determine this from the statement above. Eliminate option B.

Option C: The tariff on sports shoes imported from Macao to the Philippines is less than 25% of the cost of manufacturing sports shoes in the Philippines.
This is correct. We know from the statements above that the cost of transportation of sports shoes and the tariff on them is less than 25%. Since the combination of both costs is less than 25%, then surely one component of the cost, the tariff on sports shoes is less than 25%. Let's keep option C.

Option D: The fee for transporting a pair of sports shoes from Macao to the Philippines is more than 25% of cost of manufacturing the shoes in Macao.
This is the reverse of what has been stated above. We know the combined cost of transporting the sports shoes from Macao to the Philippines and the tariffs on the shoes are less than 25% of the manufacturing costs. Hence the cost of transportation cannot be more than 25% of cost of manufacturing sports shoes in Macao. Eliminate option D.

E. It takes 25% less time to manufacture a pair of sports shoes in Macao than it does in the Philippines.
No information was provided on the time taken to manufacture sports shoes in Macao.

The answer is, therefore, option C.

Official Explanation:

Correct Answer: C

The best answer is C. If the tariff on importing sport shoes from Macao to the Philippines were as high as 25% or more of the cost of producing sports shoes in the
Philippines, then, contrary to what the passage says, the cost of importing sports shoes would be equal to or more than the cost of producing sports shoes in the
Philippines. Thus, the tariff cannot be that high
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