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15 Apr 2025, 00:30
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Difficulty:
25%
(medium)
Question Stats:
80% (01:27) correct
20%
(01:32)
wrong
based on 114
sessions
History
Date
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Not Attempted Yet
In order to protect the fledgling national computer industry, the government of Lyonesse last year imposed a tariff on computers from Arcadia making them more expensive. Nevertheless, consumers in Lyonesse continued to buy an equal number of Arcadian computers as the year before.
Which of the following helps explain why consumers in Lyonesse continued to buy Arcadian computers?
A Most computer retailers in Lyonesse have seen an increase of 40% in sales of Arcadian computers for this year.
B As retaliation against the new tariff, Arcadia has imposed tariffs on various products from Lyonesse.
C The computers from Arcadia are essential for the air traffic control systems in Lyonesse, and cannot be replaced by computers built locally.
D Before the imposition of the tariff, the cost of manufacturing a computer in Arcadia was comparable to the cost of manufacturing it in Lyonesse.
E Most experts agree that the computers built in Lyonesse are generally of a better quality than those built in Arcadia.
Which of the following helps explain why consumers in Lyonesse continued to buy Arcadian computers?
A Most computer retailers in Lyonesse have seen an increase of 40% in sales of Arcadian computers for this year.
B As retaliation against the new tariff, Arcadia has imposed tariffs on various products from Lyonesse.
C The computers from Arcadia are essential for the air traffic control systems in Lyonesse, and cannot be replaced by computers built locally.
D Before the imposition of the tariff, the cost of manufacturing a computer in Arcadia was comparable to the cost of manufacturing it in Lyonesse.
E Most experts agree that the computers built in Lyonesse are generally of a better quality than those built in Arcadia.
15 Apr 2025, 07:13
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It's choice between C and E, am leaning towards C, because in E "most experts agree that it's better quality but it's not mentioned what quality people really need, in C it's mentioned "for air traffic control", looks essential coz can't replace with local production. So my inference - it's C.
15 Apr 2025, 12:19
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Bunuel
The question stem explains about a tariff war between two countries, same as the ongoing tariff tussle between US and some countries in the recent times. To protect the domestic computer industry, government of Lyonesse last year imposed a tariff on computers from Arcadia. The tariff (added tax or extra tax) increases the prices of the product that’s being imported from Arcadia.
Normal outcome post tariff imposition is reduction of imports of computers from Acardia. As the price of computers from Acardia will be costlier compared to the domestic computer prices of Lyonesse.
But, the outcome is different here, the number of computers sold before tariff imposition is equal to the number of products sold after tariff.
There can be many reason for this increased purchase.
1) May be the customers feel there might be an exponential increase in price, so have bought it in advance.
2) Products through illegal market - but couldn’t be counted here.
3) if there is a strong reason that the product from acardia cannot be substituted at any cost because of certain salient features. Then purchase post tariff happens.
considering the options, the only answer which stands out the rest is Option C
C The computers from Arcadia are essential for the air traffic control systems in Lyonesse, and cannot be replaced by computers built locally.
This option provides a strong reason why the quantity of Arcadian computers purchased might remain the same despite a price increase. If these computers are crucial for a vital system and there are no suitable local alternatives, Lyonesse would have to continue buying them regardless of the higher cost.
