The impact of the 1930s crisis on the different regions of Country X

Question

The impact of the 1930s crisis on the different regions of Country X varied depending on the relationship of each region's economy to the international marketplace, with region A most drastically affected. Interestingly, demand in foreign markets for Region A's tropical crops was only slightly affected by the drop in income levels after 1929; the same was true of foreign demand for the temperate-zone basic foodstuffs produced by Region B. However, Region B was better able to survive the crisis, largely avoiding the economic damage suffered by Region A's economy.

Which one of the following provides the most reasonable explanation for the fact that Region A's economy was more drastically effected by the slight decrease in demand than was Region B's?

(A) Tropical crops like those produced by Region A usually command higher prices on the world market than do basic foodstuffs like those produced by Region B.

(B) Region B's economy was dependent on annual crops, the supply of which is easily adjusted because the plants are renewed each year, in contrast to the perennial crops grown in Region A.

(C) Because tropical goods are generally bought by more affluent consumers, demand for these products rarely declines even when overall income levels drop.

(D) The temperate-zone basic foodstuffs produced in Region B directly competed with similar crops produced by the countries that imported Region B's goods.

(E) Because Region B's economy was dependent on the export of basic foodstuffs, there was only a slight decline in demand for its goods even after income levels dropped.

dream21 · Answer

Hi  GMAT888

Region A grew tropical crops(perennial) while Region B grew temperate crops(annual)
Since after 1929 the income levels fell , the production of crops of region B could have been adjusted to the new  lower demand  
However the crops of Region A were perennial, so a slight decrease in demand of the crops would have compounded during the crisis period after 1929 .

Hope it Helps!!!

RaviChandra · Answer

Premise:

The impact of the 1930s crisis on the different regions of Country X varied depending on the relationship of each region's economy to the international marketplace
International Crisis affected A's Economy affected. 
But demand for A`s tropical crops was only slightly affected .The same was true of foreign demand for the Region B`s Stuff. (A's,B's - Crops Demand was want not affected)
However, Region B was better able to survive the crisis, largely avoiding the economic damage suffered by Region A's economy.

I would like Classify these Kind of questions as "Why" Questions:

In these Kind of Question we Generally find the Premise explaining "Un Common Result" and asking to provide an answer why is that "Un Common Result" Happening.

In this Case For Example : Its Trying to ask why "Region B`s Economy was better able to survive the crisis whereas Region A's economy was not "

Definitely any Option That tries to Provide some difference between A's & B`s Product or A's & B`s Economy should be a Convincing Answer.

A) Tropical crops like those produced by Region A usually command higher prices on the world market than do basic foodstuffs like those produced by Region B.
 
  This Cannot be the Answer  : Lets Suppose Assume the Value is 10x,x respectively.The Market Value Reduces to 9.9x,0.9x : So what? Does this provide Why A had a serious Economy Crisis NO
 
B) Region B's economy was dependent on annual crops, the supply of which is easily adjusted because the plants are renewed each year, in contrast to the perennial crops grown in Region A.
 
  This Could be the Answer  : It shows a difference between how Country A,Country B Depend on the Market Place Price of their Crops. Country B has a Plan to recover in Low market value Situation whereas A doesn't.

C) Because tropical goods are generally bought by more affluent consumers, demand for these products rarely declines even when overall income levels drop.
 
  This Cannot be the Answer  : Doesn't Explain the Difference Between A & B 
 
D) The temperate-zone basic foodstuffs produced in Region B directly competed with similar crops produced by the countries that imported Region B's goods. 
 
  This Cannot be the Answer  : Doesn't Explain the Difference Between A & B
 
E) Because Region B's economy was dependent on the export of basic foodstuffs, there was only a slight decline in demand for its goods even after income levels dropped.
 
  This Cannot be the Answer : Doesnt Explain the Difference Between A & B

ajdse22 · Answer

The question contrasts between different regions which face similar situations of falling demand. Yet one region suffers more?
So if the average prices falls greater for region A, region A will suffer more. The answer choice B says that as a response to falling demand producers in region A will end up with over supply and this is a good reason for lower prices

Crytiocanalyst · Answer

(A) Tropical crops like those produced by Region A usually command higher prices on the world market than do basic foodstuffs like those produced by Region B.
IN addition to the higher price commanded we are not in a position to find out as of why region A didn't better survive the economic downtrown

(B) Region B's economy was dependent on annual crops, the supply of which is easily adjusted because the plants are renewed each year, in contrast to the perennial crops grown in Region A.

This can be taken as a valid reason as of why crops in region B better survived the impact in comparison to region a

(C) Because tropical goods are generally bought by more affluent consumers, demand for these products rarely declines even when overall income levels drop.
This however doesn't address the claim as of why was region A not able to weather the economic depression

(D) The temperate-zone basic foodstuffs produced in Region B directly competed with similar crops produced by the countries that imported Region B's goods.
This still doesn't address the reason as of why region A have faced the inappropriate setback

(E) Because Region B's economy was dependent on the export of basic foodstuffs, there was only a slight decline in demand for its goods even after income levels dropped
Similar reasoning as D 
Hence IMO B

gullyboy09 · Answer

Hi, B is the only option which tells us some structural difference between those two regions. But apart from that I am not able to infer exactly what that option meant? How come when demand is changing only slightly, for perrenial crops, impact is huge (only for slight change in demand).

guddo · Answer

The impact of the 1930s crisis on the different regions of Country X varied depending on the relationship of each region's economy to the international marketplace, with region A most drastically affected. Interestingly, demand in foreign markets for Region A's tropical crops was only slightly affected by the drop in income levels after 1929; the same was true of foreign demand for the temperate-zone basic foodstuffs produced by Region B. However, Region B was better able to survive the crisis, largely avoiding the economic damage suffered by Region A's economy.

Which one of the following provides the most reasonable explanation for the fact that Region A's economy was more drastically effected by the slight decrease in demand than was Region B's?

Foreign demand fell only slightly for both Region A’s tropical crops and Region B’s basic foodstuffs, but Region A’s economy suffered far more. So we need a reason why a small demand drop would hurt Region A much more than Region B.

(A) Tropical crops like those produced by Region A usually command higher prices on the world market than do basic foodstuffs like those produced by Region B.

Higher price does not explain higher vulnerability to a small demand drop. If anything, higher prices can mean higher margins, which could cushion a shock.

(B) Region B's economy was dependent on annual crops, the supply of which is easily adjusted because the plants are renewed each year, in contrast to the perennial crops grown in Region A.

This explains it well. If Region A grows perennial crops, it cannot cut supply quickly when demand dips, so even a small demand decrease can create oversupply and a big income hit. Region B can adjust next season.  This is the most reasonable explanation.

(C) Because tropical goods are generally bought by more affluent consumers, demand for these products rarely declines even when overall income levels drop.

This tries to explain why demand stayed high, but the passage already says demand fell only slightly in both regions. It does not explain why Region A was hit harder.

(D) The temperate zone basic foodstuffs produced in Region B directly competed with similar crops produced by the countries that imported Region B's goods.

If anything, competition would make Region B  more  exposed to demand changes, not better able to survive.

(E) Because Region B's economy was dependent on the export of basic foodstuffs, there was only a slight decline in demand for its goods even after income levels dropped.

This just repeats the given information and does not explain the different economic outcomes, so it is not an explanation.

Answer: (B)

guddo · Answer

Option B means Region A cannot “turn off the tap.” With  perennial  crops, the trees or plants keep producing year after year, so in the short run the supply is basically fixed. If demand drops even a little, you still have almost the same output, so prices can fall a lot and farmers can be stuck with unsold crops.

With annual crops (Region B), you can plant less next season, so supply can adjust downward. That makes a small demand drop less damaging because  supply can shrink to match demand .

The impact of the 1930s crisis on the different regions of Country X

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The impact of the 1930s crisis on the different regions of Country X

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