Official Explanation
1. For each of the following statements, select Weaken if the statement would weaken the claim in the Vice President's proposal. Otherwise select Not Weaken.
The grocery chain's wholesale costs are currently well above market value.
The author concludes that this deal will keep the grocery chain's wholesale costs well below market price. This is based on the premise that food prices have increased sharply and this deal would have prices increase at a set rate. The assumption in any plan argument is that there are no problems with the plan, and, therefore, to weaken this argument, you will need to find a problem with the plan.
This statement indicates that the wholesale costs are already well above market value. If this is the case, then even though the cost increase is contained, the costs are not below market value as the author concludes. This statement, therefore, does weaken the argument.
Answer: Weaken
The market price of wholesale groceries will not decrease at some point during the next ten years.
The author concludes that this deal will keep the grocery chain's wholesale costs well below market price. This is based on the premise that food prices have increased sharply and this deal would have prices increase at a set rate. The assumption in any plan argument is that there are no problems with the plan, and, therefore, to weaken this argument, you will need to find a problem with the plan.
This statement could strengthen the argument, since it rules out a potential problem with the plan. If the market price does decrease, then the set increase could keep the wholesale costs above market value. Therefore, this statement does not weaken the argument.
Answer: Not Weaken
The rate of increase in the wholesale costs of vegetables is consistent with the average rate of increase in wholesale costs for all grocery products.
The author concludes that this deal will keep the grocery chain's wholesale costs well below market price. This is based on the premise that food prices have increased sharply and this deal would have prices increase at a set rate. The assumption in any plan argument is that there are no problems with the plan, and, therefore, to weaken this argument, you will need to find a problem with the plan.
This statement could strengthen the argument, since it also rules out a potential problem with the plan. If the rate of increase in the cost of vegetables were not consistent with other grocery products, then it could be that this is an anomaly and the other products could have a more manageable increase or even no increase in price. Therefore, this statement does not weaken the argument.
Answer: Not Weaken
2. Consider each of the following statements. Does the information provided support the inference as stated?
In 1995, the grocery store chain paid 25% more for wholesale groceries than it did in 1990.
This statement could appear to be true for two reasons. The 'Market Prices' tab indicates that market prices increased by 25%, but the grocery chain is paying a set increase that is independent of market prices. Also, since there is a 5% increase in the grocery chain's wholesale costs each year for five years, it could appear that this is a 25% increase. However, during each new year, the 5% increase applies to the already increased price. For example, if the price were to be $100 and it were to increase by 5%, then the price would be $105. Another 5% increase is 5% of $105, which is $5.25, making the new price $110.25. This price is more than a 10% overall increase. This pattern will continue for all five years. Therefore, the overall increase would actually be greater than 25%. This statement, therefore, cannot be inferred.
Answer: No
For each year from 1990 to 1995, the wholesale market price of groceries increased by 5%.
You know that the market price increased by 25% over the five year period. You know that there was a consistent year by year increase from 1995 to 2000. However, you do not know that this was the case from 1990 to 1995 and, therefore, cannot infer this statement.
Answer: No
From 1990 to 1992, the prices the grocery chain paid for wholesale groceries increased by more than 10%.
This statement could appear false, since a 5% increase per year could appear to be a 10% increase over two years. However, during each new year, the 5% increase applies to the already increased price. You can plug in $100 for the prices. A price increase of 5% in 1991 would bring the price to $105. Another 5% increase in 1992 is 5% of $105, which is $5.25, making the new price $110.25. This price is more than a 10% overall increase. Therefore, this statement can be inferred.
Answer: Yes
3. The market price of groceries in 1990 was what fractional part of the market price of groceries in 2000?
You see fractions in the answer choices, so this is a hidden plug in. Since the information you're given is about percents, you would usually want to plug in $100. However, since you want two increases of 25%, which is \(\frac{1}{4}\), you want a number with two factors of 4, so try $400 instead. A 25% increase from 1990 to 1995 is an increase of \(\frac{25}{100}*400= 100\), which brings the price up to $500. Another 25% increase from 1995 to 2000 is an increase of \(\frac{25}{100}*500= 125\), bringing the price up to $625. This fraction is \(\frac{400}{625}\), which reduces to \(\frac{80}{125}=\frac{16}{25}.\)
Answer: B