Real estate agent: Over the past decade, our regions population has

Question

Real estate agent: Over the past decade, our region’s population has increased over 10 percent, and so have inflation-adjusted sales prices of local homes. Demographers project that the population will rise even more rapidly over the coming decade. Population growth increases demand for homes, and home prices rise when demand rises relative to supply. Thus, housing prices over the next decade will probably also keep rising at least as rapidly as they have been.

Which of the following is an assumption the real estate agent’s argument requires?

A. Over the coming decade, the supply of homes in the region will not increase at a significantly greater rate than the demand for homes there.

B. Other things being equal, rising home prices tend to slow regional population growth.

C. Demographers have projected that the regional population growth will cause a proportional increase in inflation-adjusted sales prices of local homes.

D. Even if the regional population does not rise over the coming decade, local housing prices will probably continue to rise.

E. Rising priced for a product during one decade usually, if not always, indicate that prices for that product will continue to rise during the next decade.

jain67 · Answer

Hi, I got this question in OG moc test 4. Can you please give a solution to this question?  MartyMurray   KarishmaB   GMATNinja

0ExtraTerrestrial · Answer

Isn’t the obvious assumption here the fact that the supply of homes doesn’t increase?

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ParthSahu_17 · Answer

Why A ? Please give me the detailed answer.

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0ExtraTerrestrial · Answer

Okay only now I am able to see the options.

sayan640 · Answer

Am I only seeing 14px in the question ?..Should be reformatted I think..

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bb · Answer

This passage is a classic assumption.  I like to try to answer the CR without reading the answer choices.

If you find answering CR's ahead of time hard and instead you like to read answers and then debate in your head - that's your choice. However, while it may be harder to answer it upfront in your own words, I find the answers to be much more accurate and the time I spend a lot less. I encourage you to try and eventually master this strategy/approach if you are not using it.

Reading the passage, I can predict that the answer will likely be that either the supply of homes will not increase (if it does, then that will break the argument) or that the population will continue buying homes (e.g. they may prefer to rent instead) and both of these things could break the argument. It took me about 5-6 seconds to come up with these and now I am checking these agains the answers.

A. Match.  If the supply increases, then the demand will not drive prices as much as it has in the past. For supply/demand to work, supply has to be fixed. But we continue to check answers just in case there is a surprise. 
 B. Seems outside of scope. We know the population will grow, so it is contradictory. Eliminate. No match
C. Seems to repeat what the premise said but in different words, so it is a premise and not an assumption. No match
D. Classic opposite option - it is not an assumption anyway. No match
E. That's a prediction and not an assumption and does not match what I am looking for. No match

Easily, A) is the match. Answered in about less than a minute.  
P.S. The matching / answering ahead of time strategy does NOT ALWAYS work. Hard CR's will not be as easy to crach (which is why they are hard) but these medium and easy ones fall apart quite easily.

Hope this was somewhat helpful. This is a standard vanilla GMAT question with very clear incorrect choices so you have 2 shots to get it right (you can either get the right choice or eliminate the incorrect ones but getting the correct one spotted is the fastest approach).

I hope it helps!
If you are having a hard time with assumptions, try the answering ahead method OR practice figuring out assumptions in daily routine. (Quietly and only to yourself), identify assumptions of your boss, your friends, news, etc. There are always assumptions. Make it into a game. Of all the questions on the GMAT, these can be the most fun - def more fun than peering through a DI table.

MartyMurray · Answer

Real estate agent: Over the past decade, our region’s population has increased over 10 percent, and so have inflation-adjusted sales prices of local homes. Demographers project that the population will rise even more rapidly over the coming decade. Population growth increases demand for homes, and home prices rise when demand rises relative to supply. Thus, housing prices over the next decade will probably also keep rising at least as rapidly as they have been.

The conclusion of the argument is the following:

housing prices over the next decade will probably also keep rising at least as rapidly as they have been

The support for the conclusion is the following:

Over the past decade, our region’s population has increased over 10 percent, and so have inflation-adjusted sales prices of local homes. Demographers project that the population will rise even more rapidly over the coming decade. Population growth increases demand for homes, and home prices rise when demand rises relative to supply.

We see that the reasoning of the argument is basically the following: The region's population is expected to rise more rapidly than in the past, increasing demand for homes, and home prices rise when demand rises relative to supply. Therefore, home prices will keep rising as rapdily as they have been.

Which of the following is an assumption the real estate agent’s argument requires?

This is an Assumption question, and the correct answer will state something that must be true for the evidence provided to support the conclusion effectively.

A. Over the coming decade, the supply of homes in the region will not increase at a significantly greater rate than the demand for homes there.

This choice is interesting.

The reasoning of the argument is basically that, since demand is projected to increase and home prices rise when demand rises relative to supply, housing prices will keep rising.

We see that the reasoning jumps from facts about an increase in demand to a conclusion about housing prices rising. Does an increase in demand guarantee an increase in prices? No, right? After all, demand is not the only thing that affects prices.

For instance, what if this choice is NOT true and the supply of homes in the region WILL increase at a significantly greater rate than the demand for homes. In that case, demand will NOT rise relative to supply, but rather will fall, in which case housing prices probably will decrease, rather than increase.

In other words, population and demand may be expected to increase, but for that information to effectively support the conclusion that prices will increase, the assumption is required that supply will not increase at a greater rate than demand.

So, for the evidence to effectively support the conclusion, this choice must be true.

Thus, this choice states an assumption that the argument requires.

Keep.

B. Other things being equal, rising home prices tend to slow regional population growth.

The argument is about what will occur as a result of the popluation rising "even more rapidly" in the coming decade than it did in the past decade.

So, the author clearly isn't assuming that anything will slow poplulation growth.

Eliminate.

C. Demographers have projected that the regional population growth will cause a proportional increase in inflation-adjusted sales prices of local homes.

This choice is tricky because the argument uses demographers' projection to support the conclusion.

At the same time, we can eliminate this choice by noticing the following: This choice states basically that demographers have "projected" the conclusion of the argument, which is basically that the projected regional population growth will result in an increase in prices.

So, this choice doesn't have to be true for the argument to work. After all, the argument can work regardless of whether demographers have arrived at the same conclusion.

In other words, even if demographers have not arrived at the argument's conclusion, the fact that population and, thus, demand will likely increase supports the conclusion that prices will increase. The argument doesn't require that demographers do anything for that evidence to effectively support the conclusion.

If demographers agree, great, but the argument works with or without their agreement.

Eliminate.

D. Even if the regional population does not rise over the coming decade, local housing prices will probably continue to rise.

The argument basically that a projected rise in population will likely resut in rising housing prices.

Concluding that that rise in population will lead to rising prices does not require assuming that prices will probably continue to rise even if the population doesn't rise.

After all, even if prices will NOT rise if the population doesn't rise, they still could rise if it does.

Eliminate.

E. Rising prices for a product during one decade usually, if not always, indicate that prices for that product will continue to rise during the next decade.

If this were true, it might be an additional reason to believe the conclusion. However, we're not looking for an addition reason to believe the conclusion. We're looking for an assumption that the argument requires, and it doesn't require this choice.

After all, even if rising prices for a product during one decade do NOT usually indicate that prices for that product will continue to rise, the argument still works. After all, in that case, the fact that population and, thus, demand are expected to rise is a reason to believe that prices will rise.

Eliminate.

Correct answer:  A

VerbalBot · Answer

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Real estate agent: Over the past decade, our regions population has

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