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ajaygaur319
Joined: 05 May 2019
Last visit: 01 Jan 2021
Posts: 125
Given Kudos: 143
Location: India
Schools: NYU Tech MBA "21
03 Mar 2020, 07:27
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
73% (02:13) correct
27%
(02:26)
wrong
based on 1019
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Economist: To increase timber exports and enhance the country’s brand name for timber, the government of Targania has planned to reduce the price at which it exports timber and has, therefore, reduced the price at which it buys timber from local manufacturers and their corresponding timber suppliers. Even though the plan will achieve its goal, because of the lower profit margins, it will also lead to a decline in profits on the processed timber sold by local manufacturers. Therefore, in the interest of the local manufacturers, the government must shelve the plan to increase the exports.
Which of the following, if true, casts the most doubt on the economist’s recommendation?
(A) A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market.
(B) Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber.
(C) The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices.
(D) The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.
(E) Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far.
Which of the following, if true, casts the most doubt on the economist’s recommendation?
(A) A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market.
(B) Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber.
(C) The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices.
(D) The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.
(E) Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far.
16 Mar 2020, 11:46
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Step 1: Identify the question type:
Question: Which of the following, if true, casts the most doubt on the economist’s recommendation?
The phrase "if true, casts the most doubt" tells us that we need to identify the option that weakens the economist's recommendation of shelving govt's plan,illustrated in the passage above.
Pre thinking: Identify an option that would give us a reason to reject the economist's recommendation and support the government decision about lowering the export prices for timber. A way that might help the local manufactures when their profit margins decrease, post implementation
Step 2: POE - Try eliminating all options
(A) A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market. This option does not support the govt's plan, it's not even relevant to the debate here
(B) Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber. It just explains that the proposed low prices are above the threshold values. This option is just checking the feasibility of the govt's plan
C) The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices
This proposes a new better plan and in turn, weakens the govt's recommendation proposed in the passage above.
(D) The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.Yes, this option tells us a way in which the gov't recommendation would help the local manufactures, whose profit margins would decline. It supports the implementation of the govt's plan and hence weakens the economist's recommendation
(E) Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far. This options talks about the situation to date and not after the govt's plan is implemented.
Question: Which of the following, if true, casts the most doubt on the economist’s recommendation?
The phrase "if true, casts the most doubt" tells us that we need to identify the option that weakens the economist's recommendation of shelving govt's plan,illustrated in the passage above.
Pre thinking: Identify an option that would give us a reason to reject the economist's recommendation and support the government decision about lowering the export prices for timber. A way that might help the local manufactures when their profit margins decrease, post implementation
Step 2: POE - Try eliminating all options
(A) A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market. This option does not support the govt's plan, it's not even relevant to the debate here
(B) Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber. It just explains that the proposed low prices are above the threshold values. This option is just checking the feasibility of the govt's plan
C) The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices
This proposes a new better plan and in turn, weakens the govt's recommendation proposed in the passage above.
(D) The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.Yes, this option tells us a way in which the gov't recommendation would help the local manufactures, whose profit margins would decline. It supports the implementation of the govt's plan and hence weakens the economist's recommendation
(E) Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far. This options talks about the situation to date and not after the govt's plan is implemented.
General Discussion
22 Apr 2020, 01:31
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Solution by eGMAT
Passage Analysis
The author of this passage is an economist.
Economist: To increase timber exports and enhance the country’s brand name for timber quality, the government of Targania has planned to reduce the price at which it exports timber and has, therefore, reduced the price at which it buys timber from local manufacturers and their corresponding timber suppliers.
The government of Targania plans to reduce the export price of timber and to reduce the price at which timber is bought from local manufacturers and supplers.
This plan is aimed to achieving at two things:
Increasing timber exports
Enhancing the country’s name for timber quality
Even though the plan will achieve its goal, because of the lower profit margins, it will also lead to a decline in profits on the processed timber sold by local manufacturers.
The economist also tells us that the plan will achieve its goals.
However, the plan will also lead to a decrease in the profits for the local manufacturers.
Therefore, in the interest of the local manufacturers, the government must shelve the plan to increase the exports.
Therefore, to protect the local manufacturers from facing a decrease in profits, the government must not implement the plan.
Through this passage, the author describes the current situation regarding readymade garments between two countries, and then the plan came up by some traders to leverage this situation.
Government of Targania plans to:
Reduce the export price of timber
Reduce the purchase price of timber from local manufacturers and suppliers.
The plan is aimed at doing two things:
Increase Targania’s timber exports
Increase Targania’s name for its timber quality
The plan will achieve its goals.
However, the plan will also reduce the profits for local timber manufacturers.
Therefore, to protect the local manufacturers, Targania’s government must not implement the plan.
Pre-Thinking
Question Stem
Which of the following, if true, casts the most doubt on the economist’s recommendation?
We need to weaken the belief that the plan must not be implemented in order to protect the local manufacturers from facing reduced profits.
So, we need to increase the belief in the notion that local manufacturers may not face reduced profits even if the plan is implemented by Targania’s government.
Weaken Framework
What new information will make me believe less in the conclusion that
local manufacturers will face reduced profits when the plan is implemented by Targania’s government.
Given that
The plan will achieve its goals of increasing Targania’s timber exports and increasing Targania's brand name for its timber quality.
The plan will also lead to a decline in profits for the timber sold by local manufacturers.
Thought Process
Let’s understand the thought process here.
A certain plan has been proposed to achieve two goals.
Increase Targania’s timber exports
Increase Targania’s name for its timber quality
The plan will achieve these goals.
But along with achieving these goals, it also reduces the profits made by local manufacturers by selling timber.
Therefore, the government should not implement the plan if it wants to protect the local manufacturers from reduced profits.
Note that the given information is related to reduction in profits on the processed timber whereas the conclusion is about overall profits for these manufacturers.
What if the implementation of the plan provides scope for the local manufacturers to maintain or even improve their overall profits?
Such a scenario will surely weaken our belief in the conclusion.
Also what if the improved branding leads to increased volume which more than compensates for the reduction in price
Keeping this understanding in mind, let’s go to the option choices.
Answer Choices
A
A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market.
This choice talks about the plans of other countries. However, this doesn’t touch upon the reduction in profits for the local timber manufacturers of Targania. Clearly, this choice is not relevant to the conclusion.
B
Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber.
This choice indicates that the new export price set by Targania is above a certain minimum limit. However, we already know that the impact of this price setting is a reduction in profits on the processed timber sold by local manufacturers. So, this choice doesn’t provide any new relevant information that can change our belief in these manufacturers’ overall profits.
The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices.
This choice talks about an alternate plan. A plan focused on spending on advertising rather than the reduction of prices. The option tells us that such an alternate plan increases both brand and exports.
There are two issues with this option choice:
Firstly, the conclusion is specifically concerned with the impact of the government’s plan on the local manufacturers. The conclusion is not concerned with other plans.
Secondly, if anything, this option choice actually indicates that the government’s plan may not be necessary to increase the branding and exports. i.e., it provides further strength to the economist’s recommendation that the plan must not be implemented. So, in a sense, this choice acts as a strengthener.
Clearly, this choice cannot act as the correct answer.
The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.
This option is in line with our pre-thinking and is the correct answer.
This choice indicates that the plan does give commensurate scope for local manufacturers to increase their overall profits through other avenues. This decreases our belief in the conclusion and therefore, is the correct answer.
E
Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far.
This choice talks about the current profit situation i.e., the situation before the implementation of the proposed plan. However, the conclusion is concerned with the change in profit situation after the implementation of the plan. Clearly, this choice is irrelevant to the conclusion.
Passage Analysis
The author of this passage is an economist.
Economist: To increase timber exports and enhance the country’s brand name for timber quality, the government of Targania has planned to reduce the price at which it exports timber and has, therefore, reduced the price at which it buys timber from local manufacturers and their corresponding timber suppliers.
The government of Targania plans to reduce the export price of timber and to reduce the price at which timber is bought from local manufacturers and supplers.
This plan is aimed to achieving at two things:
Increasing timber exports
Enhancing the country’s name for timber quality
Even though the plan will achieve its goal, because of the lower profit margins, it will also lead to a decline in profits on the processed timber sold by local manufacturers.
The economist also tells us that the plan will achieve its goals.
However, the plan will also lead to a decrease in the profits for the local manufacturers.
Therefore, in the interest of the local manufacturers, the government must shelve the plan to increase the exports.
Therefore, to protect the local manufacturers from facing a decrease in profits, the government must not implement the plan.
Through this passage, the author describes the current situation regarding readymade garments between two countries, and then the plan came up by some traders to leverage this situation.
Government of Targania plans to:
Reduce the export price of timber
Reduce the purchase price of timber from local manufacturers and suppliers.
The plan is aimed at doing two things:
Increase Targania’s timber exports
Increase Targania’s name for its timber quality
The plan will achieve its goals.
However, the plan will also reduce the profits for local timber manufacturers.
Therefore, to protect the local manufacturers, Targania’s government must not implement the plan.
Pre-Thinking
Question Stem
Which of the following, if true, casts the most doubt on the economist’s recommendation?
We need to weaken the belief that the plan must not be implemented in order to protect the local manufacturers from facing reduced profits.
So, we need to increase the belief in the notion that local manufacturers may not face reduced profits even if the plan is implemented by Targania’s government.
Weaken Framework
What new information will make me believe less in the conclusion that
local manufacturers will face reduced profits when the plan is implemented by Targania’s government.
Given that
The plan will achieve its goals of increasing Targania’s timber exports and increasing Targania's brand name for its timber quality.
The plan will also lead to a decline in profits for the timber sold by local manufacturers.
Thought Process
Let’s understand the thought process here.
A certain plan has been proposed to achieve two goals.
Increase Targania’s timber exports
Increase Targania’s name for its timber quality
The plan will achieve these goals.
But along with achieving these goals, it also reduces the profits made by local manufacturers by selling timber.
Therefore, the government should not implement the plan if it wants to protect the local manufacturers from reduced profits.
Note that the given information is related to reduction in profits on the processed timber whereas the conclusion is about overall profits for these manufacturers.
What if the implementation of the plan provides scope for the local manufacturers to maintain or even improve their overall profits?
Such a scenario will surely weaken our belief in the conclusion.
Also what if the improved branding leads to increased volume which more than compensates for the reduction in price
Keeping this understanding in mind, let’s go to the option choices.
Answer Choices
A
A recent survey by one of the most prominent trade magazines has suggested that a few other countries are also planning to cut down their timber prices in the international market.
This choice talks about the plans of other countries. However, this doesn’t touch upon the reduction in profits for the local timber manufacturers of Targania. Clearly, this choice is not relevant to the conclusion.
B
Targania’s new export price is above the minimum price limit of export timber imposed by the International Timber Export Countries Association (ITECA), a price below which no country is allowed to export timber.
This choice indicates that the new export price set by Targania is above a certain minimum limit. However, we already know that the impact of this price setting is a reduction in profits on the processed timber sold by local manufacturers. So, this choice doesn’t provide any new relevant information that can change our belief in these manufacturers’ overall profits.
The government of Targania can increase both exports and its brand by spending money on advertising rather than reducing prices.
This choice talks about an alternate plan. A plan focused on spending on advertising rather than the reduction of prices. The option tells us that such an alternate plan increases both brand and exports.
There are two issues with this option choice:
Firstly, the conclusion is specifically concerned with the impact of the government’s plan on the local manufacturers. The conclusion is not concerned with other plans.
Secondly, if anything, this option choice actually indicates that the government’s plan may not be necessary to increase the branding and exports. i.e., it provides further strength to the economist’s recommendation that the plan must not be implemented. So, in a sense, this choice acts as a strengthener.
Clearly, this choice cannot act as the correct answer.
The increased brand value of Targania’s timber due to the increased exports leads to a proportionate increase in the scope for local manufacturers to aggressively market new timber products to foreigners at exorbitant prices.
This option is in line with our pre-thinking and is the correct answer.
This choice indicates that the plan does give commensurate scope for local manufacturers to increase their overall profits through other avenues. This decreases our belief in the conclusion and therefore, is the correct answer.
E
Well-optimized cost cutting measures have helped local manufacturers to maintain decent profits so far.
This choice talks about the current profit situation i.e., the situation before the implementation of the proposed plan. However, the conclusion is concerned with the change in profit situation after the implementation of the plan. Clearly, this choice is irrelevant to the conclusion.
