The cotton farms of Country Q became so productive that the market

The conclusion is that "The government's program, if successful, will not be a net burden on the budget." Let's review what we have so far...

• Cotton prices fell because there was too much cotton on the market.
• The government wanted to boost cotton prices. How? By offering farmers incentive to take 25% of their cotton acreage out of production.
• What is that incentive? If you take 25% of your cotton acreage out of production, then the government will give you "direct support payments up to a specified maximum per farm." So we don't know how much the farmers would get, but if they take away 25% of their cotton acreage, the government will give them some money.
• For example, if you currently use 60 acres to grow cotton, the government will pay you to bring that amount down to 45 acres.

The goal of the program is to reduce the supply. The government hopes that reducing the supply will cause cotton prices to increase. This makes sense. If the cotton supply is sufficiently reduced, cotton prices should eventually go up.

But this plan has a cost. For every farm that reduces their cotton acreage by 25%, the government has to make a payment. Even if the plan successfully causes cotton prices to increase, it seems as though the government will be losing money by making all of those payments. If costs are increased and nothing else changes, the plan will be a net burden (i.e. cause a net loss) for the government.

The only way the government will NOT lose money is if the plan also somehow increases the government's revenue. If the increased revenue is at least as much as the increased costs, then the plan will NOT be a net burden.

Since the conclusion states that the plan will not be a net burden, let's look for something that could explain increased revenue IF the plan succeeds:


This is exactly what we need. With low cotton prices, the government's revenue from taxes is reduced. If the plan succeeds and prices go up, the government's revenue will also go up. So even though the plan will increase the government's costs, it should also increase its revenue.

Remember, we don't need to PROVE that the plan will succeed or PROVE that, if the plan succeeds, the increase in revenue will exceed the increase in costs. Choice (A) is the basis for a possible explanation, and that's good enough to answer the question. Keep (A).


This is evidence that the plan will have limited success the first year, but that's not what we're after. Even if the plan succeeds, the government's costs will go up as they make payments to the farms. We need something that could explain how the government might avoid a net loss despite these increased costs. Eliminate (B).


Again, this tells us that the plan had some success during the first year. As desired, cotton acreage was decreased. As explained for choice (B), we aren't looking for evidence that the plan will or will not succeed. IF the plan succeeds, how could the government avoid a net loss? That's what we need to explain, and (C) doesn't help. Eliminate (C).


Choice (D) suggests that smaller farms have a bit more incentive to accept the payments and reduce their cotton acreage than larger farmers. So (D) might be the basis for explaining why smaller farms are more likely to reduce their cotton acreage. This could explain why the plan might not achieve its goals.

But, again, we aren't looking for to explain whether the plan will or will not succeed. Choice (D) doesn't explain how the government can make up for the increased costs IF the plan succeeds, so eliminate (D).


This might be a reason why farmers would chose not to accept the payments and reduce their cotton acreage. Perhaps the farmers would have more incentive to reduce their cotton acreage if (E) were not true.

So, choice (E) could be the basis for explaining why the plan might fail. But, as explained in choice (D), this is not what we are trying to explain. Choice (E) does not help explain how the government could avoid a net loss, so (E) can be eliminated.

(A) is the best answer.