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# To meet growing energy needs in Ibernia, ...

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Director
Status: 1,750 Q's attempted and counting
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To meet growing energy needs in Ibernia, ... [#permalink]

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14 Oct 2013, 08:52
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Question Stats:

68% (02:21) correct 32% (01:46) wrong based on 574 sessions

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To meet growing energy needs in Ibernia, companies built more energy plants that burn
oil, coal, and natural gas. To limit carbon dioxide emissions and encourage the
development of "green" energy, the Ibernian governmental recently imposed a carbon tax
that directly affects the newly built plants. We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

Which of the following is an assumption on which the argument depends?

(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy.

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.

GH-06.04.13
[Reveal] Spoiler: OA
Manager
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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15 Oct 2013, 04:49
5
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(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy.--- Incorrect because if the plants can be easily converted then there will be no new plants. Carbon tax only applies to new plants so there won't be new innovation

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas. ---- Incorrect. Okay if the plants close down. Will there be any new plants? What if there is no need for any new plants... Then there will be no new plants with no innovation.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs.--- Incorrect. Out of scope. This does not really give us any info. The current plants can also suffice the increase in energy needs.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy.---- Completely irrelevant.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.--- CORRECT because the cost of alternative energy is less than the carbon tax. This means that more companies will chose to switch and in that process there will be more innovations and a decrease in reliance on fossil fuels.
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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15 Oct 2013, 07:20
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avohden wrote:
To meet growing energy needs in Ibernia, companies built more energy plants that burn
oil, coal, and natural gas. To limit carbon dioxide emissions and encourage the
development of "green" energy, the Ibernian governmental recently imposed a carbon tax
that directly affects the newly built plants. We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

Which of the following is an assumption on which the argument depends?

(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy.

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.

GH-06.04.13

(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy. Incorrect. If the plants can be easily converted then there is no need of innovation.

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas. Incorrect. If the plants are closed down, there will be no innovation.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs. Incorrect. Irrelevant fact.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy. Incorrect. Irrelevant fact.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax. Correct. Only point that supports the statement that there will be more innovation and development because the cost of developing alternative energy is less than the cost incurred by way of paying carbon tax.
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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25 Oct 2013, 20:37
I do not agree with your analysis about point B, but the rest is okey. Nice
Director
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WE: Accounting (Accounting)
Re: To meet growing energy needs in Ibernia, ... [#permalink]

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26 Oct 2013, 03:49
Official Explanation

This is an assumption question. The argument concludes that, as a result of taxes on newly built plants, companies will put more money into developing alternative energy sources. The underlying assumption is that the tax is substantial enough so that developing new technologies is a cheaper alternative to sticking with the newly built plants and paying the taxes. If you identify the assumption, you don't need to analyze each choice, as choice (E) neatly wraps up the link between the two sentences in the passage. (E) is the correct choice.
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Posts: 10161
Re: To meet growing energy needs in Ibernia, ... [#permalink]

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26 Dec 2014, 07:11
Hello from the GMAT Club VerbalBot!

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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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09 Apr 2016, 10:02
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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07 Sep 2016, 08:43
avohden wrote:
To meet growing energy needs in Ibernia, companies built more energy plants that burn
oil, coal, and natural gas. To limit carbon dioxide emissions and encourage the
development of "green" energy, the Ibernian governmental recently imposed a carbon tax
that directly affects the newly built plants. We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

Which of the following is an assumption on which the argument depends?

(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy.

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.

GH-06.04.13

this one is straight E.
my pre-thought assumption -> cost of tax will be higher than cost of development. if not, then there is no certainty that the conclusion will hold true.
E exactly specifies this case.
Intern
Joined: 08 Jul 2011
Posts: 14
Re: To meet growing energy needs in Ibernia, ... [#permalink]

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07 Sep 2016, 23:55
mvictor wrote:
avohden wrote:
To meet growing energy needs in Ibernia, companies built more energy plants that burn
oil, coal, and natural gas. To limit carbon dioxide emissions and encourage the
development of "green" energy, the Ibernian governmental recently imposed a carbon tax
that directly affects the newly built plants. We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

Which of the following is an assumption on which the argument depends?

(A) The plants that burn oil, coal, and natural gas can easily be converted so that
they use "green" energy.

(B) The carbon tax will lead to the closure of many of the plants that burn oil, coal,
and natural gas.

(C) Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs.

(D) Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy.

(E) The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.

GH-06.04.13

this one is straight E.
my pre-thought assumption -> cost of tax will be higher than cost of development. if not, then there is no certainty that the conclusion will hold true.
E exactly specifies this case.

====
Analyzing

A cannot be taken as we don't know from the passage about amount of effort required to convert to green energy
B is direct , nowhere states that Carbon tax will lead to closure of fossil plants (hence, ruled out)
C Ibernia's energy needs will continue to grow even if the carbon tax results in
higher energy costs. (??, Pre Energy Cost + C.Tax = Total Energy Cost)

Total Energy Cost > Pre Energy Cost ==> Cannot conclude if energy needs from Fossil Fuel will increase .

D Ibernia's reliance on fossil fuels is likely to cause the country to fall behind its
neighbors in efforts to develop "green" energy. ---straight out of context.

E The cost of developing alternative energy is less than the cost to existing energy
plants of the government's carbon tax.

Last paragraph--
We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

Possible only when --- option E hold true .
Cost(After Carbon Tax) > Cost (developing Alt. Energy )
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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07 Jan 2017, 00:40
Hi all,
My doubt is with option C.
Ibernia's energy needs won't continue to grow even if the carbon tax results in
higher energy costs,there is no need for any of the innovation since the carbon tax isn't applied to the existing plant ..!?
Doesn't this mean that Ibernia no loger need to build additional plants;hence,break down the conclusion of expecting more money and innovation in the development of alternative energy and a decrease....

Thanks
Intern
Joined: 24 Jun 2013
Posts: 20
To meet growing energy needs in Ibernia, ... [#permalink]

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07 Jan 2017, 21:12
sleepynut wrote:
Hi all,
My doubt is with option C.
Ibernia's energy needs won't continue to grow even if the carbon tax results in
higher energy costs,there is no need for any of the innovation since the carbon tax isn't applied to the existing plant ..!?
Doesn't this mean that Ibernia no loger need to build additional plants;hence,break down the conclusion of expecting more money and innovation in the development of alternative energy and a decrease....

Thanks

Hi,

The conclusion is that we can expect more money and innovation in alternative energy and can see decrease in reliance on fossil fuels.

As per the premise, the Ibernian governmental recently imposed a carbon tax that directly affects the newly built plants. The plants are already built and will anyways incur tax. For them not to incur tax, they will have to convert them to use alternative energy.

Now, the assumption should be necessarily true for the conclusion to be true. Since you tried to use the Negated technique, as per choice C, when you negate it, it should shatter the conclusion completely. When negated - "Ibernia's energy needs will NOT continue to grow even if the carbon tax results in higher energy costs". In other words, it can either stay the SAME or DECREASE and the existing plants will cater to it. it does not break the conclusion by providing a reason why plants will not spend more money and innovate.

However as per choice E, "The cost of developing alternative energy is less than the cost to existing energy plants of the government's carbon tax." When you negate it, by saying it is NOT less, it means the plants do not have an incentive to convert and hence the conclusion will break. Hence E is the correct answer.

Hope it helps
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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07 Jan 2017, 21:58
arichinna wrote:
sleepynut wrote:
Hi all,
My doubt is with option C.
Ibernia's energy needs won't continue to grow even if the carbon tax results in
higher energy costs,there is no need for any of the innovation since the carbon tax isn't applied to the existing plant ..!?
Doesn't this mean that Ibernia no loger need to build additional plants;hence,break down the conclusion of expecting more money and innovation in the development of alternative energy and a decrease....

Thanks

Hi,

The conclusion is that we can expect more money and innovation in alternative energy and can see decrease in reliance on fossil fuels.

As per the premise, the Ibernian governmental recently imposed a carbon tax that directly affects the newly built plants. The plants are already built and will anyways incur tax. For them not to incur tax, they will have to convert them to use alternative energy.

Now, the assumption should be necessarily true for the conclusion to be true. Since you tried to use the Negated technique, as per choice C, when you negate it, it should shatter the conclusion completely. When negated - "Ibernia's energy needs will NOT continue to grow even if the carbon tax results in higher energy costs". In other words, it can either stay the SAME or DECREASE and the existing plants will cater to it. it does not break the conclusion by providing a reason why plants will not spend more money and innovate.

However as per choice E, "The cost of developing alternative energy is less than the cost to existing energy plants of the government's carbon tax." When you negate it, by saying it is NOT less, it means the plants do not have an incentive to convert and hence the conclusion will break. Hence E is the correct answer.

Hope it helps

Hi
But if the existing plants could cater to the need,there is no need to build another.The regulation doesn't apply to the existing plants,hence no need to expect more money and innovation as we are find as is.That's why I think the conclusion break down.

Ps. I think the correct option is fine but just can't eliminate option C
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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08 Jan 2017, 02:24
Just able to crack my doubt after accidentally run into the same question
Here is a perfect explanation from TommyWallach and Honeyrai
TommyWallach wrote:
Hey Nverma,

It's a tough question, but the answer is definitely C. You have to stay REALLY close to what's written.

The passage says that the company has concluded it COULD increase profits by OPENING a factory. So the issue isn't whether it is possible to open a factory, but whether IF THE FACTORY WERE OPENED, it would make a profit.

Answer choice A tells us that it will be difficult to open the factory, but that is unrelated to the conclusion. We're only interested in whether or not an OPEN FACTORY would be profitable. There is no need to differentiate between long-term and short-term profits, or between present and future profits. This is about a hypothetical situation in which the factory is open. Only C relates to this.

Hope that helps!

honeyrai wrote:
nifoui wrote:
The answer to the question is C, with this explanation from MGMAT:
In order for Company Y to conclude that it can increase long-term profits by opening a factory in Country X, it must believe that a sustainable market exists for its products in that country. Otherwise, the new factory would not generate revenue and the company could not recoup the cost of the new factory.

What I don't get: how can C be right because the passage states that company Y currently produces goodsfor sale in country X.... so we know that there is a market for comany Y in country X, no?

What am I missing?

Don't miss the word 'sustainable'. Country X is selling its products today means that its products have a market today. That doesn't ensure that the products will have market tomorrow also. It's whole plan is based on long term gains. What use id it of if it opens a factory today & has a market today but 2 years down the line it realizes that its market has ceased to exist.

A & E are lucrative options but out of the scope of the problem.
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Re: To meet growing energy needs in Ibernia, ... [#permalink]

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08 Jan 2017, 16:26
I really don't like how E is worded. Makes it seem like the people Running the current plants are the only ones who would be investing in alternative energy (i.e. The cost of the tax is lower to these producers than switching to alt energy.) what about new entrants to the market? You don't need to assume anything about the current energy producers investments if The conclusion only states that more money and investment would flow to alternative energy.

I chose C. If you reverse it and say that they demand for energy goes down, indiviuals will be less likely to invest in alternative energy as there is not as high of a demand for it. Feel that is better than E. not sure this would be near the OG.
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To meet growing energy needs in Ibernia, ... [#permalink]

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20 Mar 2017, 04:34
pafrompa wrote:
I really don't like how E is worded. Makes it seem like the people Running the current plants are the only ones who would be investing in alternative energy (i.e. The cost of the tax is lower to these producers than switching to alt energy.) what about new entrants to the market? You don't need to assume anything about the current energy producers investments if The conclusion only states that more money and investment would flow to alternative energy.

I chose C. If you reverse it and say that they demand for energy goes down, indiviuals will be less likely to invest in alternative energy as there is not as high of a demand for it. Feel that is better than E. not sure this would be near the OG.

Hi,
In GMAT questions you have to accept what is given in the question instead of using your real world knowledge .In this question we have to find the bridge between premise and conclusion.

Premise : To meet growing energy needs in Ibernia, companies built more energy plants that burn
oil, coal, and natural gas. To limit carbon dioxide emissions and encourage the
development of "green" energy, the Ibernian governmental recently imposed a carbon tax
that directly affects the newly built plants.

Conclusion : We should therefore expect to see more money
and innovation in the development of alternative energy and a decrease in the country's
reliance on fossil fuels.

The author has concluded on the logic that if government will impose tax , companies will find alternate , environment friendly ways but what if for companies paying tax is cheaper than investing in new technologies then companies will continue with current technology in spite of paying tax and conclusion will fall apart. Therefore option E works as bridge here between premises and conclusion and supports the conclusion.
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To meet growing energy needs in Ibernia, ...   [#permalink] 20 Mar 2017, 04:34
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