Electric utilities pay less for low-quality coal per ton

Question

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high-quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

The considerations above, if true, most strongly support which of the following claims?

(A) A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.

(B) In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.

(C) Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.

(D) It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.

(E) In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.

variablechange · Accepted Answer

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

I'm going to do a hypothetical based on what's given: Ordering a ton of coal. It's 45 dollars for a ton of low quality coal, and $10 for a ton of high quality coal. Hypothetically, say 1.5 tons is needed to generate electricity from low quality coal, and 1 ton is needed to generate electricity from high quality coal. This means our costs are at $7.50 for low quality coal buyers, and $10 for high quality coal buyers for the generation of electricity. Now we will look up disposal, for a ton of low quality coal we will say it'd $10 a ton for disposal, and $5 for high quality coal disposal. This creates low quality coal burning ton price of $17.5 and a high quality price off 15$. Ultimately, this isnt necessary to do, but it paints the picture.

The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible. Correct. This is essentially saying, buying low priced coal might not always be the economic best option. See above, there are other costs which might make it economically not better. Again, this isn't saying that it absolutely must always be true, it's just saying that it must "could be true"  
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal NO. This isn't guaranteed, because aside from disposal you have electricity generation. We don't know if they need far more coal to produce electricity. If the case, this would be false. 
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.  We don't know what transportation costs will even be. 
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal. No. Apples to apples. Could be true, we don't know for sure though. 
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.  No. We don't know if this is the case or not.

GyanOne · Answer

A) CORRECT. Although utilities pay less for low-quality coal, they must use more of it and also bear expenditures involved in ash disposal. Therefore a policy of always buying low-quality coal might not always lead to economic benefit if the costs are greater than the savings. 
B) Incorrect. Even if the cost of disposing coal ash is negligible, utilities must buy more of low-quality coal to generate the same amount of electricity. Therefore the savings from buying low-quality coal (as compared to high-quality coal) may be mitigated through the increased usage of low quality coal. Therefore we cannot conclude reasonably that buying high-quality coal will be more expensive in this situation. 
C) Incorrect. We are not given any details on the proportion of costs involved so cannot make this conclusion. 
D) Incorrect. We are given no information about disposal costs, so we cannot compare. 
E) Incorrect. The rate of decline of coal reserves are not based on the costs involved in disposing off ash generated through burning the coal. We cannot reasonably draw this conclusion.

A) is therefore the correct answer.

greatps24 · Answer

Why D is wrong?

D is assumption , right? What if disposal of Coal ash from low quality coal cost $10 and disposal of Coal ash from High quality coal cost $50.

Assumption is hidden premise--> Strengthner

D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.

anshunadir · Answer

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.

The considerations above, if true, most strongly support which of the following claims?

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible.  can be proved from the passage 
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal.    output of low quality coal is less, probable lot more low quality coal needs to be burned to match the output of high quality coal and that may equalise or exceed the cost for generating power from low quality coal  
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal.   Transportation cost is out of scope  
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.   passage does not compares costs of low quality ash and high quality ash  
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.   can't be sure,people might use low quality coal because of cost reasons and they might not like to use low quality coal for lower output

plumber250 · Answer

Hi Responding to a PM, regarding why D is wrong.

First let us break down the paragraph point by point:

Electric utilities pay less for low-quality coal per ton delivered than for high-quality coal. 
 Low quality coal cheaper than high quality coal

Yet more low-quality coal than high—quality coal must be burned to generate the same amount of electricity. 
 But need to burn more of it to make same amount of electricity

Moreover, per ton of coal burned, low-quality coal generates more ash than does high-quality coal, and the disposal of ash is becoming more and more expensive.
 Low quality coal also costs more in disposal costs

The considerations above, if true, most strongly support which of the following claims?
 These 3 statements add up to what?

D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.
 D only really talks about the last one of the 3 points. It's not really related to the whole debate - that is to say which is the better OVERALL option high or low quality.

Hope it helps

theGame001 · Answer

In the same way can you please explain why A is correct? Also what exactly the question is asking?

semwal · Answer

FACT1. Electric utilities pay less for low-quality  coal per ton   than for high-quality coal.
FACT2. More low-quality coal than high—quality coal must be burned to generate the same amount of electricity.
FACT3. Low-quality coal generates more ash than does high-quality  coal PER TON. 
FACT4. Disposal of ash is becoming more and more expensive.

A. A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible....YES ... BECAUSE THERE ARE OTHER FACTORS ALSO EG QUANTITY USED, ASH DISPOSAL... ETC
B. In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal...CAN'T REALLY SAY THAT.....OUT PUT ALSO MATTERS.....
C. Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal...COULD BE TRUE IF COAL COST PER TON MORE THAN TRANSPORTATION COST PER TON IN BOTH CASES...BUT THAT'S NOT ASSURED.....
D. It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal......SINCE IT IS ONE TON ASH IN BOTH CASES.... APPEARS TO BE OK.....BUT MAY BE PHYSICAL QUALITY OF ASH MAY LEAD TO VARIATION.....
E. In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal....WHY PRESUME LOW QUALITY WILL BE PREFERRED IN THIS CASE........

BETWEEN "A"AND "D"........"A" APPEARS BETTER OPTION.......

ShashankDave · Answer

Good question. Got this one right. Is this a 700 level question? What do experts say? would be happy to hear from them.

onkargm · Answer

Here the simple reason to disqualify  D  is that it is nowhere given in the passage that disposing ash generated by burning high quality coal costs as much as disposing ash generated by burning low quality coal. We do not have any information about that so we can't infer that. Now coming to the option  A , we do not have precise cost of either high quality or low quality coal. Suppose High quality coal costs 40$ per ton and low quality coal costs 1$ per ton. To generate certain amount of electicity we use 1 ton HQ coal and 1.2 ton of LQ coal. Per ton burning high quality coal generates 1 kg of ash and burning low quality coal generates 10 kg of ash. Let us assume that the previous cost of disposing ash generated by low quality coal was 50 cents per kg previously, now it has become 75 cents per kg  (it is increasing) . We are still in profit for using low quality coal to generate electricity. But it is mentioned in the passage that  it is becoming more and more expensive to dispose the ash , so in some point in the future we will not have an incentive to use low quality coal.

Siva2021 · Answer

IMO A
Though electric utilities pay less for low quality coal they must use more of it thereby creating problems of ash disposal which would cost them a lot of money.Therefore the expenses of ash disposal incurred would outweigh the savings of buying low quality coal.The utilities may not be benefited by buying huge volume of low quality coal for a low cost causing them a huge drain on their resources.Only option A can be reasonably concluded.Other options are out of scope or information given in the passage is not sufficient to reasonably verify the claims indicated by other options.Please give me kudos. I want them badly to increase my score.

nkmungila · Answer

A
It predicts that low quality coal costs less, it may have expensive coal ash disposal

Sreyoshi007 · Answer

A states that even if the cost is less, there is no assurance that the coal-burning utility will benefit economically, as there can be various other factors. Hence A is the correct answer.

dcummins · Answer

A - Correct. We are given the information to believe that selecting the lowest cost coal won't necessarily result in economic benefits if by-product costs and other production process costs are more expensive.

B- Incorrect. Even if the cost is negligible we know that more truck loads are required to dispose of 1 burnt coal ton for low coal, so this statement is false.

C- Incorrect. This is false, In fact it is likely that TC represent a higher proportion of low-cost coal.

D- Incorrect. We can't infer this. We just know that disposal costs are increasing in general.

E- Incorrect. We cannot infer this. Why would reserves deplete faster just because transport costs are lower? This means consumption increases. There is not basis to support this.

altairahmad · Answer

A is too open-ended. If the expensive coal is purchased at a cheaper price then there will be economical benefits. Similarly we don't know that how much of cheap coal is equivalent to expensive coal. Even more of the cheap coal might still be less expensive. We have no information to infer A directly.

On the other hand, for D, the passage only says that the amount of ash produced is more. D says that per kg of ash for cheap and expensive coal is same.

At best, D requires the same 'amount' of inference as A. A is not a sure winner.

Basshead · Answer

I think a lot of people are eliminating D for the wrong reason.

Here is D:

It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal.

So D is saying that a ton of coal ash from high-quality coal is just as expensive, if not more, as a ton of coal ash from low-quality coal.

So this choice is simply saying that  pound for pound , high-quality coal ash is just as expensive, if not more, as a ton of coal ash from low-quality coal. However, the passage doesn't support this statement.
 
Knowing that  low-quality coal generates more ash than does high-quality coal  does not mean high-quality coal ash is just as expensive to dispose as low quality coal ash.

bv8562 · Answer

egmat 
What does this statement " The considerations above, if true, most strongly support which of the following claims? " mean?

And since, the author of the stimulus concludes that " Yet more low-quality coal than high-quality coal  must  be burned to generate the same amount of electricity. ", does that not mean that the low-quality coal is still somehow economical to use even if the low-quality coal generates more ash than does high-quality coal and the disposal of ash is becoming more and more expensive?

Because of the presence of the word  MUST  in the conclusion I eliminated option A. Could you please throw some light on this one?

Dinesh654 · Answer

official explanation:

Reasoning What conclusion would the statements about utilities’ coal-related expenses support? Low-quality coal costs less per ton, but burning low-quality coal generates electricity less efficiently and produces more ash, which utilities must pay an increasing amount to dispose of. It’s unclear whether overall coal purchasing costs are lower with low-quality or high-quality coal, since the lower price per ton of the former may counterbalance the need to buy more tons to generate the same amount of electricity. Although ash disposal is becoming more expensive, we are not told how that expense compares to those of the other factors mentioned; it may be negligible.

A. Correct. The information presented does not clearly support a conclusion about whether it’s economically beneficial for coal-burning utilities to minimize their coal-purchasing costs. Therefore, utilities relying solely on this information cannot be assured that it is.

B. Since high-quality coal burns more efficiently, the utilities can buy less of it to generate the same amount of electricity, potentially compensating for its greater expense per ton.

C. The transportation costs per ton are probably about the same for low-quality coal as for high-quality coal. Therefore, they are probably a greater proportion of the lower cost per delivered ton of low-quality coal.

D. We are given no information about whether the cost to dispose of a ton of coal ash depends on the type of coal burned to generate that ash.

E. Even in the regions where coal-ash disposal is least expensive, it may still be expensive enough to encourage utilities to mine and burn more high-quality coal and thus generate less ash.

Raman109 · Answer

Understanding the argument - The argument, in a way, is trying to convey that using cheaper coal may not be cost-effective if we look at the overall picture.

The considerations above, if true, most strongly support which of the following claims?

(A) A coal-burning utility might not be assured of benefiting economically by always adhering to the policy of keeping its overall coal purchasing costs as low as possible. - Aligned to the main crux that we deduced from the statements.

(B) In those regions where the cost of disposing of coal ash is negligible, it is more expensive for coal-burning utilities to use high-quality coal than low-quality coal. - We don't know. Maybe we use more low-quality coal, thus paying more than the high-quality coal. It might be true option types are wrong, as we can't say with 100% certainty.

(C) Transportation costs represent a smaller proportion of the cost per delivered ton for low-quality coal than for high-quality coal. We don't know from the argument. Distortion as it uses some words from the sentence and tries to package an option to mislead.

(D) It is no less expensive to dispose of a ton of coal ash that results from the burning of high-quality coal than it is to dispose of a ton of coal ash that results from the burning of low-quality coal. The argument says it's becoming more expensive, not that it is already expensive. It may or may not be. Wrong.

(E) In regions where coal-ash disposal is the least expensive, reserves of low-quality coal are likely to decline at a faster rate than are reserves of high-quality coal.- Out of scope. Talking about reserves is out of argument scope and far-fetched.

sriramsundaram91 · Answer

The problem I had was in the comprehension of what an "Electric utility" means -- It seems like electric utility refers to organizations that generate, distribute and transmit electricity. I simply assumed electric utilities mean Mixer, Blender, microwave etc. Looks like these are appliances and not electric utilities, Once I got the meaning right, the answer followed.

Electric utilities pay less for low-quality coal per ton

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Electric utilities pay less for low-quality coal per ton

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