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The people of Prohibitionland are considering banning the

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Re: The people of Prohibitionland are considering banning the [#permalink]

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New post 31 Jan 2017, 10:35
souvik101990 wrote:
The people of Prohibitionland are considering banning the service of alcoholic beverages in restaurants to curb unruly behavior on the part of its residents. Proprietors of restaurants in Prohibitionland are protesting the ban on the grounds that it will reduce their revenues and profits. However, several provinces in Prohibitionland enacted
restrictions on alcoholic beverages last year, and the sales taxes paid by the restaurants in those provinces rose by an average of 50 percent. In contrast, the sales taxes paid by restaurants located in areas of Prohibitionland that did not have any restrictions rose by an average of 30 percent.

Which of the following, if true, supports the restaurant proprietors’ economic stance against the ban?

A. In the provinces that restricted alcoholic beverages, there was a short-term negative impact on restaurant visitation in the beginning of last year.

B. The sales tax in Prohibitionland is lower on food and beverages than it is on other consumer goods, such as clothing.

C. The consumption of alcoholic beverages in Prohibitionland has been on a gradual decline the last 20 years.

D. The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.

E. Overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions on alcoholic beverages than in the rest of Prohibitionland last year.


The argument concerns the economic impact on restaurants in Prohibitionland if the service of alcoholic beverages is banned. It presents evidence that, despite restrictions on the service of alcohol in certain areas of Prohibitionland, sales taxes in restaurants in those areas rose at a higher rate than for those in other parts of Prohibitionland, suggesting that the ban would not have any adverse economic impact. We are asked to support the restaurant proprietors' claim , so the correct answer choice will call the relevance of the seemingly contradictory evidence into question.

(A). This answer choice may seem to strengthen the argument that banning the service of alcoholic beverages would have an adverse impact on restaurants. However, as the evidence involves data for the entire year, citing a short-term negative impact on restaurant visitation at the beginning of the year does not measurably strengthen the argument.
(B) The relative tax rate on food and beverages as compared to other consumer good is irrelevant here.
(C) A gradual decline in alcohol consumption over the past 20 years would suggest that over time, any ban on alcohol would have an increasingly small impact on restaurant visitation, weakening the proprietors’ argument.
(D) CORRECT. This statement calls the evidence into question by indicating that any measured increase in sales taxes and, presumably, revenues for restaurants that have been operating under the restrictions last year enacted is irrelevant, as the restrictions could be argued to be completely different than the total ban that is being proposed. This answer choice substantially strengthens the proprietors’ argument by threatening to make the cited evidence irrelevant.
(E) The fact that overall sales tax revenue did not increase at a higher rate in the provinces that enacted the restrictions on alcoholic beverages weakens the proprietors’ argument, as it makes the cited evidence more compelling by ruling out the possibility of different growth rates in the different areas.
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Re: The people of Prohibitionland are considering banning the [#permalink]

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New post 01 Feb 2017, 10:34
Nice question.
The Argument plays with the words "Ban" and "Restriction".... :)

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Re: The people of Prohibitionland are considering banning the [#permalink]

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New post 01 Feb 2017, 22:09
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We can simplify the argument to -

Proprietors
Ban on alcohol --> Reduction in revenues

Counter Argument
Restriction on sale of alcohol --> Higher percentage increase in revenues (because sales tax in regions with restrictions increased by a much higher percentage).

Immediately we see that the two arguments do NOT talk about the same things.

The proprietors' argument talks about "ban of alcohol", the counter argument about "restriction on alcohol". Not the same thing.

Option A - Incorrect.
Strengthens the argument by saying that the negative impact was only temporary. The overall impact must have been good because the sales tax increased by 50%.

Option B - Incorrect.
We are concerned only about sales of alcohol, not about consumer goods. So, the comparison made here is irrelevant.

Option C - Incorrect.
We are not concerned about any historical trend in the sales of alcohol but about the effects of alcohol ban.

Option D - Correct.
By stating that "restrictions on alcohol" are not outright ban on sales of alcohol, this option suggests that the two actions might not have the same impact.

Option E - Incorrect.
We are not concerned about overall sales tax revenue, but only about sales/sales tax revenue from restaurants. Not relevant.
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Re: The people of Prohibitionland are considering banning the [#permalink]

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New post 12 Nov 2017, 20:49
Is'nt D the best option? I reached D through process of elimination . Options A,B and c out of scope.E is about overall sales revenue. So we are left with D. Please correct if I am wrong
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Re: The people of Prohibitionland are considering banning the [#permalink]

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New post 13 Nov 2017, 04:08
NEENA SHEREEN wrote:
Is'nt D the best option? I reached D through process of elimination . Options A,B and c out of scope.E is about overall sales revenue. So we are left with D. Please correct if I am wrong


(D) is the best option. Check here:
https://gmatclub.com/forum/the-people-o ... l#p1358559
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Re: The people of Prohibitionland are considering banning the   [#permalink] 13 Nov 2017, 04:08

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