Last visit was: 19 Jul 2024, 05:00 It is currently 19 Jul 2024, 05:00
Toolkit
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

# The government of Lemaria subsidizes its coal mining operations; as a

SORT BY:
Tags:
Show Tags
Hide Tags
Manager
Joined: 16 Jan 2023
Posts: 108
Own Kudos [?]: 114 [4]
Given Kudos: 82
Location: India
Concentration: Finance, Accounting
GMAT Focus 1:
655 Q85 V81 DI82 (Online)
WE:Consulting (Consulting)
Quant Chat Moderator
Joined: 22 Dec 2016
Posts: 3138
Own Kudos [?]: 5080 [1]
Given Kudos: 1859
Location: India
Intern
Joined: 19 Jan 2023
Posts: 6
Own Kudos [?]: 2 [0]
Given Kudos: 6
Manager
Joined: 13 Dec 2023
Status:Applying in R1 of 2024 to t15
Affiliations: University of Tennessee
Posts: 132
Own Kudos [?]: 215 [1]
Given Kudos: 46
Location: United States (CO)
Concentration: Strategy, Finance
GMAT Focus 1:
605 Q76 V84 DI80
GMAT Focus 2:
615 Q78 V86 DI78
GPA: 3.62
WE:Analyst (Consumer Products)
Re: The government of Lemaria subsidizes its coal mining operations; as a [#permalink]
1
Kudos
Benja1597 wrote:
I cant see a good answer for this question.

The argument states that there is a subsidy for coal mining, in addition the argument says that most energy is genereted from coal burning plants.

To ecourage power companies to change from coal to a less polluting fuel, the goverment is going to discontinue the subsidy for coal.

B) States that coal still been a little cheaper than other less polluting fuels, thus company will still prefering the coal instead of the other fuels, because companies naturally seek their purpouse of having more profits.
If does not exist a type of penalization for the use of coal that directly affect the economic goal of companies, they would not change to another fuel source.­

­This question asks us which answer choice strengthens the claim that by discontinuing subsidies for coal, more energy companies will switch to less polluting energy sources.

The reason I think this one is hard is because the correct answer choice doesn't strengthen all that much, only slightly. That's why it's really important to eliminate each answer choice.

Ask yourself "will this lead to energy companies switching to less polluting energy sources" on each of the answer choices. If the answer is definitely no then cross it out. If you're not sure, just leave it alone and go to the next one.

You won't get questions like these right consistently if you don't use the method above. Why? Because this problem exemplifies how sometimes the best way to find the correct answer is to eliminate all of the incorrect answers.­­

IMO, the correct answer choice can make you think "since coal is priced only slightly above other less polluting energy sources, maybe without the subsidy it will be priced below" which then, to your point, a company would want to choose a cheaper energy source. It's not certain whether this is true or not. But what IS certain is that there's zero chance any of the other answer choices will make companies want to switch.­­
GMAT Club Legend
Joined: 31 Jan 2020
Posts: 4464
Own Kudos [?]: 1335 [2]
Given Kudos: 16
The government of Lemaria subsidizes its coal mining operations; as a [#permalink]
2
Kudos
You want to look for something in which the plan will increase the likelihood of power companies switching from COAL to a LESS POLLUTING FUEL. Don't think there's a CR like this on the gmatknight blog currently but one thing you could keep in mind is that you don't have to prove power companies will switch in order to support it's more likely to happen.

The government of Lemaria subsidizes its coal mining operations; as a result, coal-based energy prices are relatively low for consumers, and most of the electricity generated in Lemaria is generated in coal burning plants. In an effort to encourage power companies to switch from coal to less polluting fuel, the government's energy commission plans to discontinue subsidies for coal.

Which of the following, if true, lends the most support to a prediction that by enacting the plan the energy commission will achieve its goal?

A. Most coal that is used in Lemaria is used to generate electricity.
Even if most coal was NOT used to generate electricity, this doesn't speak to the likelihood of the plan working or not. The market price of coal remains the market price, for example. And we're already told that most of the electricity generated in Lemaria is in coal burning plants.

B. Sources of energy that pollute less than coal are now only slightly more costly in Lemaria than coal is.
This is the answer.­ Without these subsidies, it's likely coal will end up being more expensive than these less polluting sources of energy. Fair to say power companies would find it financially more attractive to switch if coal wasn't cheaper anymore. I admit it doesn't confirm that they would, but we're looking for something that kind of pushes us into that direction.

C. Converting a coal-burning power plant to the use of an alternative fuel entails a substantial cost.
This goes in the wrong direction in terms of what we're looking. It kind of makes it more likely a power company would stick with coal. "It's gonna cost WHAT to convert this plant?! Even if this low-polluting fuel is cheaper, the eyewatering cost of these machines... would we even be better off financially?!"

D. The Lemarian government does not currently subsidize any fuels other than coal that can be used to generate electricity.
You know.... this is an interesting one. But ultimately (as long as the rest of the energy market remains the way it currently is) the plan only meaningfully affects the market price of coal.

E. Previous initiatives by Lemaria's government aimed at reducing pollution from energy production have all been designed to promote a reduction in energy usage by consumers
Nope. This doesn't increase the likelihood that the current plan will ACHIEVE its goal.

Originally posted by GmatKnightTutor on 06 Mar 2024, 22:33.
Last edited by GmatKnightTutor on 18 May 2024, 14:58, edited 1 time in total.
Intern
Joined: 04 Oct 2023
Posts: 43
Own Kudos [?]: 14 [0]
Given Kudos: 27
Location: India
Concentration: Technology, Other
GMAT Focus 1:
595 Q79 V83 DI76
GPA: 3.5
Re: The government of Lemaria subsidizes its coal mining operations; as a [#permalink]
Problem : pollution
Plan : discontinue subsidy to coal
Solution intended : company switch from coal to something else

I eliminated c,d,e easily . However option B tells about the whether the companies can switch to another source

Posted from my mobile device
Intern
Joined: 19 Jan 2023
Posts: 6
Own Kudos [?]: 2 [0]
Given Kudos: 6
Re: The government of Lemaria subsidizes its coal mining operations; as a [#permalink]

GmatKnightTutor wrote:
You want to look for something in which the plan will increase the likelihood of power companies switching from COAL to a LESS POLLUTING FUEL. Don't think there's a CR like this on the gmatknight blog currently but one thing you could keep in mind is that you don't have to prove power companies will switch in order to support it's more likely to happen.

The government of Lemaria subsidizes its coal mining operations; as a result, coal-based energy prices are relatively low for consumers, and most of the electricity generated in Lemaria is generated in coal burning plants. In an effort to encourage power companies to switch from coal to less polluting fuel, the government's energy commission plans to discontinue subsidies for coal.

Which of the following, if true, lends the most support to a prediction that by enacting the plan the energy commission will achieve its goal?

A. Most coal that is used in Lemaria is used to generate electricity.
Even if most coal was NOT used to generate electricity, this doesn't speak to the likelihood of the plan working or not. The market price of coal remains the market price, for example. Worth remembering, we're already told that most of the electricity generated in Lemaria is in coal burning plants.

B. Sources of energy that pollute less than coal are now only slightly more costly in Lemaria than coal is.
This is the answer.­ Without these subsidies, coal will end up more expensive than less polluting sources of energy. Fair to say power companies may find it financially more attractive to switch at that point. I admit it doesn't confirm they would, but we're looking for something that kind of pushes us into that direction.

C. Converting a coal-burning power plant to the use of an alternative fuel entails a substantial cost.
This goes in the wrong direction and makes it more likely a power company may stick with coal.

D. The Lemarian government does not currently subsidize any fuels other than coal that can be used to generate electricity.
You know, this is an interesting one. But ultimately, as long as the rest of the energy market remains as it is, the plan only meaningfully affects the market price of coal.

E. Previous initiatives by Lemaria's government aimed at reducing pollution from energy production have all been designed to promote a reduction in energy usage by consumers
Nope. First, this talks about previous plans (not this plan) which can potentially be a bit concerning. Second, the objective of the current plan is to get POWER COMPANIES to use less coal - not consumers to use less coal.

I missinterpreted the answer by thinking that even after the subsidy were cut, coal would still being cheaper.
but what the answer was saying is that with the existing subsidy, coal was just a little cheaper than other fuels and therefore if the subsidy is eliminated, the less polluting fuels could be cheaper than or at least equal to the cost of coal, thus incrementing the likelihood of companies change their fuel source.

am I right?
Intern
Joined: 28 May 2024
Posts: 5
Own Kudos [?]: 1 [0]
Given Kudos: 0
The government of Lemaria subsidizes its coal mining operations; as a [#permalink]
­I was wondering, can't we argue for optin D that if the subsidies are cut, the price of coal might come in parallel to the other sources and hence the power companies can now choose other sources given that price for all are equal ?­ GmatKnightTutor Fish181
The government of Lemaria subsidizes its coal mining operations; as a [#permalink]
Moderators:
GMAT Club Verbal Expert
6984 posts
GMAT Club Verbal Expert
236 posts
CR Forum Moderator
824 posts