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The people of Prohibitionland are considering banning the

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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.

Originally posted by applecrisp on 09 Dec 2007, 17:27.
Last edited by broall on 03 Jun 2017, 08:17, edited 2 times in total.
Added OA.
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New post 29 Sep 2012, 23:29
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vmdce129907 wrote:

Sanjoo,

"The people of Prohibitionland are considering banning the service of alcoholic beverages" - shows it will be a complete ban.


Proprietors protest on grounds that the ban will reduce their revenues and profits. Even if there are certain restrictions - like serve alcohol beginning dinner time, this cannot guarantee no reduction in revenues or profits. If the restaurants were serving alcohol whole day due to which their revenues are pretty high, This restriction will be a better option to chose than a complete ban. Restriction, however, will still lead to losses (lesser).

how could a sales tax increase by 50% if this restriction was enforced - The reason may be - that earlier those restaurants were not serving alcohol, after restriction they started serving. Anyways whatever the reason be - the sales tax increase by 50% in restricted areas and 30% in non-restricted areas could be because of some other reason.

Given an option, i would chose D but This question looks flawed and unconvincing.



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vmdce129907 wrote:

Sanjoo,

"The people of Prohibitionland are considering banning the service of alcoholic beverages" - shows it will be a complete ban.


Proprietors protest on grounds that the ban will reduce their revenues and profits. Even if there are certain restrictions - like serve alcohol beginning dinner time, this cannot guarantee no reduction in revenues or profits. If the restaurants were serving alcohol whole day due to which their revenues are pretty high, This restriction will be a better option to chose than a complete ban. Restriction, however, will still lead to losses (lesser).

how could a sales tax increase by 50% if this restriction was enforced - The reason may be - that earlier those restaurants were not serving alcohol, after restriction they started serving. Anyways whatever the reason be - the sales tax increase by 50% in restricted areas and 30% in non-restricted areas could be because of some other reason.

Given an option, i would chose D but This question looks flawed and unconvincing.



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Great conversation already on this one, but I'll chime in since this problem is actually from a Manhattan GMAT practice CAT.

It's a pretty convoluted passage, so let me first simplify:

Proprietors: We don't want a ban, since that will reduce our revenues.
Counterpoint: Some counties have restrictions, and taxes paid by restaurants in those counties rose more quickly than they did in other counties.

Our goal is to support the proprietors' argument. To do so, we need to explain the increase in tax revenues in "restriction" counties. The only way to do this is to exploit the distinction between "restriction" and "ban". Remember, you're not allowed to bring in outside knowledge, but you are allowed to know the definition of the words used! A restriction is less, well, restrictive than a full ban.

Only (D) exploits this issue in the counterpoint. Sure, a restriction might not damage the proprietors' revenue, but if (D) is true then it's still possible that a full ban might negatively affect those revenues.

A couple major takeaways:

1. Pay attention to the exact wording of the argument.
2. Watch out for arguments that try to generalize from the specific (a restriction on alcohol) to the more general (a full ban).
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New post 01 Oct 2008, 22:29
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Quote:
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.



Extracting info from the passage:

-----
People: lets ban alcohol in bars
Bar owners: No, will reduce our revenues!
People use example to support their claim: restrictions were implemented in some provinces -> revenues up!

Support bar owners claim.
----

How to support owners? Fight the evidence (the People’s example) used!

Couple things I note while reading the passage:
1. People propose a “ban” but use "restrictions" in their example. Do the terms mean the same thing?
2. Even with restrictions bar’s revenues increased!

The only question in my mind by now is does “restrictions”=”full restrictions” i.e. ban?

Because if restrictions are “full” (i.e. no alcohol is sold) but revenues increased than Bar Owners have nothing to worry about should ok the ban and expect revenue growth. However, if restrictions are *partial* (say only 2 hours/day alcohol sale is permitted) then the evidence People use to support their claim (2 hrs/day alcohol sales but revenues show increase) will definitely show that alcohol sales make $$$ and by implementing the ban this dollar stream will be gone!

Now, D tells us that alcohol was sold couple hours per day i.e. the restrictions do not equal to ban!
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New post 04 Oct 2008, 05:37

Official explanation from Manhattan GMAT CAT



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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New post 26 Sep 2012, 13:07
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l will try and explain, hope it helps you.

We have to find a statement that supports the people protesting against the ban of alcohol in prohibitionland as they say they will lose moNey if the ban is enacted.

Now we are given that at places where ban was enacted the sales rose by 50 percent and where it was not enacted it rose by 30 percent. The mystery is that how come even after the ban there was a rise of 50 percent. This is solved by D that since even after the ban they were allowed to sell drinks in the evening, people were drinking heavily in those hours and thus the dramatic increase in sales.

Now if a complete ban on sales is there then the provinces which had an increase of 30 percent will go to zero thus supporting the ban against prohibition and supporting people that they will lose money.

Hope this helps. ThanKs
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New post 26 Sep 2012, 22:14
adineo wrote:
l will try and explain, hope it helps you.

We have to find a statement that supports the people protesting against the ban of alcohol in prohibitionland as they say they will lose moNey if the ban is enacted.

Now we are given that at places where ban was enacted the sales rose by 50 percent and where it was not enacted it rose by 30 percent. The mystery is that how come even after the ban there was a rise of 50 percent. This is solved by D that since even after the ban they were allowed to sell drinks in the evening, people were drinking heavily in those hours and thus the dramatic increase in sales.

Now if a complete ban on sales is there then the provinces which had an increase of 30 percent will go to zero thus supporting the ban against prohibition and supporting people that they will lose money.

Hope this helps. ThanKs



Thanks for ur reply :) nice explanation..:) but .....
Proprietors of restaurants in Prohibitionland are protesting the ban on the grounds that it will reduce their revenues and profits.

Is this line convey that this will be the complete ban?? .. If stimulus saying that 50% increase in sales, Bt choice D saying "The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening".. Then this choice is weakend the propertier's argument..because Proprieter are again the ban .. bt this ban still allow the allow for service of dinks around dinner time, and this dinner time service will increase there sales 50%..
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New post 27 Sep 2012, 09:06

Sanjoo,

"The people of Prohibitionland are considering banning the service of alcoholic beverages" - shows it will be a complete ban.


Proprietors protest on grounds that the ban will reduce their revenues and profits. Even if there are certain restrictions - like serve alcohol beginning dinner time, this cannot guarantee no reduction in revenues or profits. If the restaurants were serving alcohol whole day due to which their revenues are pretty high, This restriction will be a better option to chose than a complete ban. Restriction, however, will still lead to losses (lesser).

how could a sales tax increase by 50% if this restriction was enforced - The reason may be - that earlier those restaurants were not serving alcohol, after restriction they started serving. Anyways whatever the reason be - the sales tax increase by 50% in restricted areas and 30% in non-restricted areas could be because of some other reason.

Given an option, i would chose D but This question looks flawed and unconvincing.



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New post 01 Nov 2012, 23:26
Wow a great question. Must say a Toughie
+1 D.
Reason:
D states that the restrictions on alchohlic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.
First of all, ban did hurt the revenues and profits in that after the ban on alchoholic drinks,the restaurants were ONLY allowed to sell drinks each evening at dinnertime. Naturally, the sales will dip because they are selling drink only at evening and that too at dinnertime, when people are more concerned for their dinner.
I have given emphasis on "only", because ban was imposed on the sale of alchoholic drinks but were allowed to be sold at evenings. If they were allowed to be sold at other time also, then whats the use of that "ban".
E is incorrect because even though the provinces where the ban was not enacted, the sales tax revenue rose. how? E states that "Overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions on alchoholic beverages than in the rest of Prohibitionland last year". It compares the rate of increase of sales tax revenue. Hence it implies that sales tax revenue inceased in the provinces where the ban was enacted.
Hope that helps.
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New post 23 Apr 2014, 05:46
IMO A.
Proprietors claim that their revenue will decrease and only option A is talking about decrease in customers visit even if it is short term but it goes along with proprietors claim. For increase in sales tax underlying cause could be anything, option D does not prove anything.
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Re: The people of Prohibitionland are considering banning the  [#permalink]

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New post 23 Apr 2014, 06:20
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PiyushK wrote:
IMO A.
Proprietors claim that their revenue will decrease and only option A is talking about decrease in customers visit even if it is short term but it goes along with proprietors claim. For increase in sales tax underlying cause could be anything, option D does not prove anything.


Actually (A) is not correct. Short term negative impact does not strengthen proprietors’ stance because the argument clearly mentions that in the entire year (last year), the sales taxes and hence presumably the revenue rose by 50%. So even if there is some negative impact in the beg, overall impact is much more positive and hence proprietors’ fear of lesser revenue seems to be baseless.

We need an option which strengthens proprietors’ stance that prohibition will decrease revenue.

Option (D) doesn't really strengthen the proprietors’ stance directly but it opposes data given in the argument to weaken the proprietors’ stance. The argument tries to convince you that proprietors are worried for no reason since restrictions were not able to reduce revenue last year. Option (D) tells you that the restrictions were not bans but just time restrictions and hence that situation is not comparable to this. Hence options (D) weakens the relevance of data given to weaken proprietors’ stance. In that sense, it strengthens the proprietors’ stance. It's "enemy's enemy is a friend" situation. The reason it works is that there is no better option.
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New post 05 Apr 2015, 21:10
consider ban serving alcohol in restaurants
b/c want to stop bad behavior
restaurant owners don't want to
b/c they say it will reduce revenues and profits
BUT last year some provinces did enact restrictions (just restrictions though - maybe not an outright ban, as is being considered above?)
result: those restaurants that did have the restrictions paid 50% more in sales tax after the restrictions were put in place (implication: so they were selling a lot anyway?)
restaurants that didn't have restrictions only had sales tax increase of 30% (implication: so their business didn't grow as much as the ones that did have the restriction? So the restaurant owners who don't want the ban should actually want it b/c somehow it will help business? By the way, maybe the reason the other group pulled in more sales taxes was because the tax rate went up, not because they sold more.)

The stuff in parentheses above = my own thoughts as I read the argument, based on what the author is saying. That stuff is not stated in the argument.

What supports the people who don't want the alcohol ban?
- Right now, the author is claiming that the areas with restrictions (last year) actually did better than the areas without restrictions; by that reasoning, the restaurant owners should want the ban. So somehow we have to tear down the idea that the ban would be better for the restaurants, not worse.

(A) at the beginning of the year, there was a negative impact based on the restrictions, but it was only short-term.
- this doesn't help the restaurant owners to make the case that there shouldn't be a ban - the negative effects were only short-term

(B) Sales tax on other consumer goods = out of scope. We're trying to figure out whether an alcohol ban will hurt business for restaurants.

(C) fewer people are drinking alcohol
- If not many people drink it, then the restaurant owners wouldn't care as much about banning it.

(D) restrictions last year still allowed alcohol to be served at dinner and at night
- oh, so the restrictions last year weren't an outright ban? Then dismissing the problem by saying the restrictions didn't hurt business means nothing - a ban is a much more extreme situation. Maybe most people drink at night and that's why last year's restrictions didn't hurt business, but it would hurt business greatly from now on if people can't drink at night.

(E) the restriction areas didn't suddenly have the sales tax rate increase a lot last year compared to the non-restriction areas.
- so the discrepancy in sales tax revenues wasn't due to any disparity in sales tax rates in the region. It was about equal for both. That still leaves the author's claim that the restricted areas did better than the non-restricted areas, so why are the restaurant owners complaining about a ban?
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Re: The people of Prohibitionland are considering banning the  [#permalink]

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New post 31 Jan 2017, 11:35
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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New post 01 Feb 2017, 23:09
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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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New post 12 Sep 2018, 11:11
IMO ,D is correct

D attacks the similarity between the two cases :

provinces with restriction 50% , provinces with no restriction 30%

restriction = no alcohol before dinner

but the ban = no alcohol at any time ---> no comparison

so we cant use the " restriction ,no restriction " case to infer that same thing will happen to a province with a BAN
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