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# Too many words...aka, really hard

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Intern
Joined: 28 May 2010
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Too many words...aka, really hard [#permalink]

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25 Jul 2010, 13:50
00:00

Difficulty:

55% (hard)

Question Stats:

55% (01:01) correct 45% (01:25) wrong based on 31 sessions

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I think I'll just skip a question like this on the exam, but I really would love a little more explanation...

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?

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

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

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

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

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

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Manager
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Re: Too many words...aka, really hard [#permalink]

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25 Jul 2010, 21:41
knabi wrote:
I think I'll just skip a question like this on the exam, but I really would love a little more explanation...

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

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.

E is contradicting the facts stated in the argument. As per argument sales tax increased by an avg of 50% in areas where restrictions were enacted, whereas E maintains that overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions. There4 E ruled out.

Clearly D it is. The analogy is- if X then Y can also be if Z then Y. The service of drinks beginning around dinnertime each evening increased thereby increased the sales tax by avh 50%. This argument used the evidence of alcoholic beverages to reach the conclusion about another. Here two things(alcoholic beverages and other drinks) are similar enough to sustain the comparison.
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Re: Too many words...aka, really hard [#permalink]

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26 Jul 2010, 01:01
I pick D. :D I have done this question before.

Argument:

Law maker: Nonsense, last year, when there is the restriction on alcohol, the sales tax increase by 50%. (so it shouldn't be bad for business, if not to say, good for business)

D - Show that there is a different between "restriction" and "ban", restriction still allow business to sell at night time and thus sales tax increased, but now, totally banning will surely deplete the business.

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Manager
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Re: Too many words...aka, really hard [#permalink]

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26 Jul 2010, 06:54
Yes, I'm for D too
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+1 kudos me if this is of any help...

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Re: Too many words...aka, really hard [#permalink]

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26 Jul 2010, 08:28
I guess this question is from the OG.. I would pick D as well... I think E does not support the argument in anyway

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Director
Status: Impossible is not a fact. It's an opinion. It's a dare. Impossible is nothing.
Affiliations: University of Chicago Booth School of Business
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Re: Too many words...aka, really hard [#permalink]

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26 Jul 2010, 11:38
Nice one !
The rise in sales tax was not an accident. It happened bcos the restriction allowed alcohol sales. So it supports the proprietor's argument that totally banning alcohol will hurt the Govt sales tax as well as their profits.

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Re: Too many words...aka, really hard [#permalink]

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26 Jul 2010, 13:11
straight away go and mark D

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Manager
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Re: Too many words...aka, really hard [#permalink]

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27 Jul 2010, 03:31
this is a kaplan CAT question..encontered it in my CAT1

in my test i chose C in a hurry. But D actually shows that "banning the service of alcoholic beverages" was also done last year to only at nights. Already there profits and margin are low
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Re: Too many words...aka, really hard [#permalink]

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27 Jul 2010, 22:17
Good explanations I picked E ............but was skeptic myself ........

If there is a difference between Ban and restrictions ..then D ought to be correct ......

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Re: Too many words...aka, really hard [#permalink]

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28 Jul 2010, 15:52
Good explanation!
+1
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Re: Too many words...aka, really hard [#permalink]

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12 Sep 2010, 06:10
Still not too clear on this
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Re: Too many words...aka, really hard [#permalink]

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12 Sep 2010, 07:42
nice question....
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Re: Too many words...aka, really hard [#permalink]

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16 Sep 2010, 06:53
ya nice question i think D

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Re: Too many words...aka, really hard [#permalink]

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16 Sep 2010, 07:54
D for me too

kidchaos wrote:
Still not too clear on this

The line of reasoning is
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.

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Re: Too many words...aka, really hard   [#permalink] 16 Sep 2010, 07:54
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