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# Twenty years ago, Balzania put in place regulations

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Twenty years ago, Balzania put in place regulations [#permalink]

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24 Dec 2004, 22:49
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Twenty years ago, Balzania put in place regulations requiring operators of surface mines to pay for the reclamation of mined-out land. Since then, reclamation technology has not improved. Yet, the average reclamation cost for a surface coal mine being reclaimed today is only four dollars per ton of coal that the mine produced, less than half what it cost to reclaim surface mines in the years immediately after the regulations took effect.

Which of the following, if true, most helps to account for the drop in reclamation costs described?

A. Even after Balzania began requiring surface mine operators to pay reclamation costs, coal mines in Balzania continued to be less expensive to operate than coal mines in almost any other country.
B. In the twenty years since the regulations took effect, the use of coal as a fuel has declined from the level it was at in the previous twenty years.
C. Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas.
D. Even after Balzania began requiring surface mine operators to pay reclamation costs, surface mines continued to produce coal at a lower total cost than underground mines.
E. As compared to twenty years ago, a greater percentage of the coal mined in Balzania today comes from surface mines.
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Re: reclamation of mined-out land [#permalink]

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13 Jul 2009, 11:41
I have a feeling it should be E. OA pls?

Why not C> We are talking about average reclamation cost. Now if the mining is 'ceased' in mountainous areas then this area wont be considered in calculating the average cost of reclamation.

Why E> If greater percentage of coal is mined now from surface mines then the average cost will come down.

ritjn2003 wrote:
Twenty years ago, Balzania put in place regulations requiring operators of surface mines
to pay for the reclamation of mined-out land. Since then, reclamation technology has not
improved. Yet, the average reclamation cost for a surface coal mine being reclaimed
today is only four dollars per ton of coal that the mine produced, less than half what it
cost to reclaim surface mines in the years immediately after the regulations took effect.
Which of the following, if true, most helps to account for the drop in reclamation costs
described?
A. Even after Balzania began requiring surface mine operators to pay reclamation
costs, coal mines in Balzania continued to be less expensive to operate than coal
mines in almost any other country.
B. In the twenty years since the regulations took effect, the use of coal as a fuel has
declined from the level it was at in the previous twenty years.
C. Mine operators have generally ceased surface mining in the mountainous areas of
Balzania because reclamation costs per ton of coal produced are particularly high
for mines in such areas.
D. Even after Balzania began requiring surface mine operators to pay reclamation
costs, surface mines continued to produce coal at a lower total cost than
underground mines.
E. As compared to twenty years ago, a greater percentage of the coal mined in
Balzania today comes from surface mines.
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Re: reclamation of mined-out land [#permalink]

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20 Jul 2009, 04:15
C, IMHO E does'nt attempt to explain why the prices have come down. In fact
@Economist:
Quote:
Why E> If greater percentage of coal is mined now from surface mines then the average cost will come down.

I could not gather why greater % coal mined from surface mines will bring the avg cost down. There is no comparison b/w mountainous v/s non mountainous costing in the question.
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Re: reclamation of mined-out land [#permalink]

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20 Jul 2009, 10:07
Economist wrote:
I have a feeling it should be E. OA pls?
Why not C> We are talking about average reclamation cost. Now if the mining is 'ceased' in mountainous areas then this area wont be considered in calculating the average cost of reclamation.

Average = (X + Y+ Z....) /N

But if you remove higher values of the set, the average goes down. That's the intent of the option C

Economist wrote:
Why E> If greater percentage of coal is mined now from surface mines then the average cost will come down.

Why? This doesn't affect the average reclamation cost ($/ton). Increase in surface mines => Increase in Coal Amount ==> But reclamation cost remains the same ($/ton) as technology doesn't change.

Here, C is correct. Example of above,

there are no. of shops sell item at price x,y,z / item. x>y>z

and tax = t%
from shop 1 => tx will be tax
shop2 => ty
shop 3 ==> tz

As shop1 is selling item at higher price, it is giving more tax /item than other shop.

So if shop1 is removed and only shop2 and shop3 types remain in the market average tax/item will decline.

Reclamation cost is similar to tax in this case; mountainous area is similar to the shop1.
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26 Oct 2009, 04:08
If the use of coal has declined then the coal prioces have decreased..which means that reclamation costs will also go down..
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Re: GWD CR: Balzania's regulation for land reclamation [#permalink]

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26 Oct 2011, 00:16
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Problem with B :
It says that the use of coal has been reduced. But that doesn't mean that mining is ceased. It its quite possible that the mining is still continued and the coal is exported to other countries.

Explanation of C ( CORRECT answer)

Let there be 3 sites in Balzania - site 1 , 2 and 3 - where surface mines were operated .
Let a , b and c tons of coal were processed from the 3 sites respectively
and the cost for reclamation be c1, c2 and c3 respectively.

then the average reclamation cost : (ac1 + bc2 + cc3)/ (a+ b+ c)
Now let site 3 be the mountainous area.

Now if site 3 stops mining,
then the average reclamation cost : (ac1 + bc2)/ (a+ b)

It is given that c3 is very high. Hence the new average reclamation cost should decrease provided the value of c is very small.

But this is the best answer here and we should go with choice C.
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Re: GWD CR: Balzania's regulation for land reclamation [#permalink]

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26 Oct 2011, 07:55
Quote:
average reclamation cost for a surface coal mine being reclaimed today is only four dollars per ton of coal that the mine produced

Average reclamation cost today = $4 per ton of coal. Since the average is given per ton of coal, any choice that only talks about total amount of coal is irrelevant. B falls in that category. (as does E) C wins. Crick Senior Manager Joined: 25 Nov 2011 Posts: 256 Location: India Concentration: Technology, General Management GPA: 3.95 WE: Information Technology (Computer Software) Followers: 4 Kudos [?]: 182 [0], given: 20 Re: Twenty years ago, Balzania put in place regulations [#permalink] ### Show Tags 17 Jan 2012, 06:38 Initially I thought the answer is B. But after seeing OA, I understand why C is correct answer. The word 'average' in the argument is signalling it. _________________ ------------------------- -Aravind Chembeti Intern Joined: 20 Nov 2011 Posts: 37 Concentration: Marketing, International Business GMAT Date: 05-28-2012 GPA: 3.23 WE: Engineering (Computer Software) Followers: 0 Kudos [?]: 32 [0], given: 5 Re: CR GMATREP [#permalink] ### Show Tags 16 Apr 2012, 01:51 Its C=> Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas. earlier reclamation cost was high because => mining was done @ mountainous areas now it cheap because => mining is done not @ mountainous areas ( other location where reclamation cost is less) Director Joined: 03 Aug 2012 Posts: 897 Concentration: General Management, General Management GMAT 1: 630 Q47 V29 GMAT 2: 680 Q50 V32 GPA: 3.7 WE: Information Technology (Investment Banking) Followers: 24 Kudos [?]: 764 [0], given: 322 Re: Twenty years ago, Balzania put in place regulations [#permalink] ### Show Tags 19 Feb 2013, 22:17 Twenty years ago, Balzania put in place regulations requiring operators of surface mines to pay for the reclamation of mined-out land. Since then, reclamation technology has not improved. Yet, the average reclamation cost for a surface coal mine being reclaimed today is only four dollars per ton of coal that the mine produced, less than half what it cost to reclaim surface mines in the years immediately after the regulations took effect. P1: -20 yrs -- regulations -- operators pay reclamation amount P2: reclamation technology has not improved C: Today : Cost is 4$/ton as compared to >=10 \$/ton before 20 yrs after regulations took place.

IMO The answer should be (E). As stated below:

Just after regulations : Total Coal : 1000 , Coal from surface mines: 100 (10%)

Now : Total Coal: 1000 ,Coal from surface mines: 200 (20%)

Other things being equal , if you are increasing the denominator than the expression will decrease.Here tons have increased ,thereby decreasing the dollar per ton Value.

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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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19 Feb 2013, 22:31
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@targetgmatchotu - I dont believe you are reading the question correctly. The reclamation costs refer only to the coal produced from surface mines, not the total coal produced. Hence, the reclamation costs/ton of coal do not change regardless of whether surface mine satisfy half or country's demand or 20% of the demand.

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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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20 Feb 2013, 03:53
Twenty years ago, Balzania put in place regulations requiring operators of surface mines
to pay for the reclamation of mined-out land. Since then, reclamation technology has not
improved. Yet, the average reclamation cost for a surface coal mine being reclaimed
today is only four dollars per ton of coal that the mine produced, less than half what it
cost to reclaim surface mines in the years immediately after the regulations took effect.
Which of the following, if true, most helps to account for the drop in reclamation costs
described?
A. Even after Balzania began requiring surface mine operators to pay reclamation
costs, coal mines in Balzania continued to be less expensive to operate than coal
mines in almost any other country. . Out of scope. No comparison with other country is mentioned above
B. In the twenty years since the regulations took effect, the use of coal as a fuel has
declined from the level it was at in the previous twenty years. Passage is about average reclamation cost for a surface coal mine, not about use of coal
C. Mine operators have generally ceased surface mining in the mountainous areas of
Balzania because reclamation costs per ton of coal produced are particularly high
for mines in such areas.
D. Even after Balzania began requiring surface mine operators to pay reclamation
costs, surface mines continued to produce coal at a lower total cost than
underground mines. OFS: Passage do not mention about any comparision
E. As compared to twenty years ago, a greater percentage of the coal mined in
Balzania today comes from surface mines. Passage is about average reclamation cost for a surface coal mine
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Re: Twenty years ago, Balzania.... [#permalink]

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06 Apr 2013, 15:09
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Nice question. I picked D and got it wrong. But after review, C is the best.
This is resolve the paradox, so we don't have conclusion here, just fact.
Fac1: 20 years ago, there was a regulations requiring operators to pay for the reclamation.
Fac 2: Reclamation technology has not improve
Fac 3: But the AVERAGE reclamation cost today is 1/2 compared to that of 20 years ago.

Why: Key word here is AVERAGE reclamation cost (ARC). ARC is calculated from reclamation cost in Balzania, and reclamation costs from other areas. ARC will reduce, if operators move from high cost areas to lower cost areas. It means operators moved out Balzania to areas that have lower reclamation cost. That is C.

anish123ster wrote:
n y not B..???

B is out because it talks about the reduction of quantity (Q), but average cost couldn't decrease if cost/ton - Price (P) - did not decrease.
To be more clear, let try the equation.

Average cost = [Q1xP1 + Q2xP2 + ...........+ QnxPn] / [Q1 + Q2 +.....+ Qn]
Q1 = quantity in area 1; P1 = reclamation cost/ton in area 1
Q2 = quantity in area 2; P2 = reclamation cost/ton in area 2

B says [Q1 + Q2 +.....+ Qn] reduced, it means only the denominator decreased, but it doesn't say the numerator also decreased.
What if Q decreased, but P increased! Average cost will not decrease.

I hope it helps.

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Re: Twenty years ago, Balzania.... [#permalink]

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06 Apr 2013, 18:58
A. Irrelevant. Comparison of reclamation cost of Balzania with reclamation cost of other country is out of scope.
B. Decline in use of coal as a fuel cannot possibly result in reduction in average reclamation cost.
C. Correct. This option mentioned about reducing high-cost operation which results in reduction in average reclamation cost.
D. There is no relevance of bringing in production cost for underground mines. We need to stick to the cost for surface mines only.
E. This statement has no useful information on how the average reclamation cost has been reduced.
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Re: Twenty years ago, Balzania.... [#permalink]

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06 Apr 2013, 19:44
B cannot be the answer coz the use of coal as fuel will affect the demand side cost and not the supply side cost incurred by the manufacturer .yes u might argue that selling price of coal might get reduced but here we are not talking of the selling price of coal .we r talking of the cost incurred in taking out coal from mines !!
make sense ?
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Re: Twenty years ago, Balzania.... [#permalink]

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06 Apr 2013, 23:14
I still cant understand as to why B cant be the answer. Since the demand of coal as a fuel has decreased, in order to make up that loss for the operators of surface mines and also to provide incentive, Bulzania might have decreased the reclamation cost..
Hence, I still feel that B should be the answer. Please let me know if I am wrong. Thanks in advance.
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Re: Twenty years ago, Balzania.... [#permalink]

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07 Apr 2013, 00:46
revanthnov wrote:
I still cant understand as to why B cant be the answer. Since the demand of coal as a fuel has decreased, in order to make up that loss for the operators of surface mines and also to provide incentive, Bulzania might have decreased the reclamation cost..
Hence, I still feel that B should be the answer. Please let me know if I am wrong. Thanks in advance.

Option B is concerned with total reclamation cost and the argument is all about average reclamation cost. A decrease in total does NOT mean decrease in average. That's how option B is incorrect.
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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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24 Jan 2014, 03:25
Twenty years ago, Balzania put in place regulations requiring operators of surface mines to pay for the reclamation of mined-out land. Since then, reclamation technology has not improved. Yet, the average reclamation cost for a surface coal mine being reclaimed today is only four dollars per ton of coal that the mine produced, less than half what it cost to reclaim surface mines in the years immediately after the regulations took effect.

Which of the following, if true, most helps to account for the drop in reclamation costs described?

A. Even after Balzania began requiring surface mine operators to pay reclamation costs, coal mines in Balzania continued to be less expensive to operate than coal mines in almost any other country.
B. In the twenty years since the regulations took effect, the use of coal as a fuel has declined from the level it was at in the previous twenty years.
C. Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas.
D. Even after Balzania began requiring surface mine operators to pay reclamation costs, surface mines continued to produce coal at a lower total cost than underground mines.
E. As compared to twenty years ago, a greater percentage of the coal mined in Balzania today comes from surface mines.

My reasoning, If the government enacted a clampdown on regulations in the past but now that same price charged has been adjusted-down then something must have happened. The only thing that pops up in my head is that most likely after the clampdown industries' costs for mined-out land outweighed their profits and thus industries reasonably flee from the marked, obliging the government to re-adjust the tax.

Then I sighted the answers and saw that C was a good candidate. Picked and moved on.
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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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26 Jan 2014, 12:32
CONCLUSION- Average reclamation cost for a surface coal mine being reclaimed today is less than half what it cost to reclaim surface mines in the years immediately after the regulations took effect.

Which of the following, if true, most helps to account for the drop in reclamation costs described?

A. Even after Balzania began requiring surface mine operators to pay reclamation costs, coal mines in Balzania continued to be less expensive to operate than coal mines in almost any other country.NO. WE TALK OF RECLAMATION COST HERE NOT COAL COST
B. In the twenty years since the regulations took effect, the use of coal as a fuel has declined from the level it was at in the previous twenty years.COAL QUANTITY BEING USED IRRELEVANT.....
C. Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas. THE MINE OPERATORS ARE CLEVER.... THEY HAVE REDUCED THE AVERAGE RECLAMATION COST BY REDUCING UPON HIGHER RECLAMATION RATE AREAS....
D. Even after Balzania began requiring surface mine operators to pay reclamation costs, surface mines continued to produce coal at a lower total cost than underground mines.NO SUCH COMPARISON REQUIRED HERE
E. As compared to twenty years ago, a greater percentage of the coal mined in Balzania today comes from surface mines.WHERE COAL COMES FROM IS IRRELEVANT

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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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07 May 2014, 17:59
Twenty years ago, Balzania put in place regulations requiring operators of surface mines to pay for the reclamation of mined-out land. Since then, reclamation technology has not improved. Yet, the average reclamation cost for a surface coal mine being reclaimed today is only four dollars per ton of coal that the mine produced, less than half what it cost to reclaim surface mines in the years immediately after the regulations took effect.

Which of the following, if true, most helps to account for the drop in reclamation costs described?

A. Even after Balzania began requiring surface mine operators to pay reclamation costs, coal mines in Balzania continued to be less expensive to operate than coal mines in almost any other country...Premises dont talk about comparison between countries and neither the question stem mentions anythin about the same. IRRELEVENT

B. In the twenty years since the regulations took effect, the use of coal as a fuel has declined from the level it was at in the previous twenty years...Uses of coal not relevent.

C. Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas...Areas where reclamation costs are high have been ceased to operate. Hence an overall decrease in the reclamation cost (area reclaimed/total cost..denominator stands the same while the numerator decreases)

D. Even after Balzania began requiring surface mine operators to pay reclamation costs, surface mines continued to produce coal at a lower total cost than underground mines...No talk about underground mines. Hence irrelevent.

E. As compared to twenty years ago, a greater percentage of the coal mined in Balzania today comes from surface mines...Again not a comparison between surface and other mine areas. Hence irrelevent.

Option B

I think the most important point is to concentrate on the stem and using the options we have to explain the given contradiction.
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Re: Twenty years ago, Balzania put in place regulations [#permalink]

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19 May 2014, 12:51
A. Even after Balzania began requiring surface mine operators to pay reclamation costs, coal mines in Balzania continued to be less expensive to operate than coal mines in almost any other country.
Out of scope. talks about operational costs, not reclamation costs
B. In the twenty years since the regulations took effect, the use of coal as a fuel has declined from the level it was at in the previous twenty years.
tempting choice..however do not assume that costs will go down if there is no demand, a resolve the paradox must address the discrepancy without assuming anything
C. Mine operators have generally ceased surface mining in the mountainous areas of Balzania because reclamation costs per ton of coal produced are particularly high for mines in such areas.
correct.. if reclamation costs are high for surface mining, ceasing surface mining on mountaineous areas will imply less mining, which in turn will give less reclamation costs, hence average will decline
D. Even after Balzania began requiring surface mine operators to pay reclamation costs, surface mines continued to produce coal at a lower total cost than underground mines.
out of scope, talks about production costs
E. As compared to twenty years ago, a greater percentage of the coal mined in Balzania today comes from surface mines.
incorrect.. average costs will increase in this case
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Re: Twenty years ago, Balzania put in place regulations   [#permalink] 19 May 2014, 12:51

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