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# The people of Prohibitionland are considering banning the

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

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09 Dec 2007, 17:27
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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.
[Reveal] Spoiler: OA

Last edited by broall on 03 Jun 2017, 08:17, edited 2 times in total.

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

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29 Sep 2012, 23:29
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Expert's post
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.

Press +1 Kudos if you like my reply

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.

Press +1 Kudos if you like my reply

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

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

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

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23 Feb 2008, 16:20
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Conclusion: The impact of prohibition on the economy

In the provinces that restricted alcoholic beverages, there was a short-term negative impact on restaurant visitation in the beginning of last year. [This weakens the conclusion – eliminate it]

The sales tax in Prohibitionland is lower on food and beverages than it is on other consumer goods, such as clothing. [Sales tax comparison does not support the conclusion – eliminate it]

The consumption of alcoholic beverages in Prohibitionland has been on a gradual decline the last 20 years. [Alcohol sales pattern last 20 years has no effect on the conclusion – eliminate]

The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening. [Effective time of prohibition is out scope – eliminate it]

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. [Hold it]

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

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12 Mar 2008, 08:58
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dynamo wrote:
ocprep wrote:
The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening. I agree with D since it provides the reason for why sales taxes increased for restaurants in restricted areas. What's the OA?

The question asked is restaurant proprietors’ economic stance against the ban?
We have to justify the restaurant proprietors’ stand against the ban and not prove that sales taxes increased for restaurants in restricted areas.

Keeping the question in mind ,IMo is A..

Any takers.

Well here's my reasoning...IMO choice D supports their economic stance and taxes do play into it...
1) Proprietors of restaurants in Prohibitionland are protesting the ban on the grounds that it will reduce their revenues and profits.
2) But several provinces in Prohibitionland enacted restrictions 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 that did not have any restrictions went up only 30 percent. In essence, the proponents of the ban are saying that sales tax increased for restaurants that had restrictions therefore sales did not decrease.
3) But D, explains why sales tax (income) increased even with the restriction for those restuarants because they still sold alcohol.

Your choice A says there was a short term negative impact and that really doesn't support the cause. What's the OA?

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

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03 Oct 2008, 13:41
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E is wrong. Let’s quickly re-read the passage.

"
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.

And one more time 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!

Ok, to support their position People say the revenues increased in the test provinces. Now if the test province revenues were to increase because of the higher province tax then Bar owners could undermine Peoples evidence. Answer E tells us that it is not the case i.e. we can’t take this route to fight Peoples argument.

Thus E does not fly here.

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

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10 Dec 2007, 11:17
D. The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.

They're trying to ban alcohol by showing positive growth figures from an area where restrictions didn't ban alcohol at all. Argument doesn't make sense.

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

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23 Feb 2008, 15:53
A ?

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

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23 Feb 2008, 16:55
A for me.

Whats the OA?

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

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24 Feb 2008, 13:07
Im for E.

A is only shortterm. What if in the longterm there are positive results? Dunno, this isnt enough in my opinion.

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

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24 Feb 2008, 21:37

NOT E because it says that the over all revenues didnt increase at a substantial rates, but we are least bothered about overall revenues.
IT is clear from the passage that the revenues rose by 50% in the province which have restrictions.
we just need to attack this point becoz we can prove that the same rise wouldnt be seen in our case, that wud be the solution.
and D fits the bill perfectly.

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

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26 Feb 2008, 01:00
E. What is OA
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Re: The people of Prohibitionland are considering banning the [#permalink]

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26 Feb 2008, 08:56

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

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11 Mar 2008, 02:47
E for me. The question asks for an "Economic Stance" and E fits the bill perfectly. A is also likely but unfortunately it is only short term.

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

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11 Mar 2008, 12:16
Large percentages doesn't mean large amounts and reverse is also true. E is correct.

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

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11 Mar 2008, 12:27
The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening. I agree with D since it provides the reason for why sales taxes increased for restaurants in restricted areas. What's the OA?

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

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12 Mar 2008, 00:41
ocprep wrote:
The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening. I agree with D since it provides the reason for why sales taxes increased for restaurants in restricted areas. What's the OA?

The question asked is restaurant proprietors’ economic stance against the ban?
We have to justify the restaurant proprietors’ stand against the ban and not prove that sales taxes increased for restaurants in restricted areas.

Keeping the question in mind ,IMo is A..

Any takers.

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

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12 Mar 2008, 14:21
I vote E. All others were eliminated.

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

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12 Mar 2008, 14:26
I am somewhat confused at the term "tax revenues". Does that mean revenues to the regulators, or revenues to the restaurants? I am viewing it as a tax revenue to the regulators, which then rules out D.

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Re: The people of Prohibitionland are considering banning the   [#permalink] 12 Mar 2008, 14:26

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