The cost of manufacturing microchips in Country K is 15 percent greate

Question

The cost of manufacturing microchips in Country K is 15 percent greater than the cost of manufacturing the same microchips in Country P. Even after customs taxes and delivery fees are considered, it is still cheaper for Country K to import microchips from Country P than to have the microchips manufactured domestically.

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

(A) Customs taxes are less in Country K than they are in Country P.
(B) It takes 15 percent more time to manufacture a microchip in Country K than it does in Country P.
(C) The taxes and fees associated with importing microchips from Country P to Country K are less than 15 percent of the cost of manufacturing those microchips in Country K.
(D) Importing microchips from Country P will reduce employment opportunities in manufacturing by 15 percent in Country K.
(E) Manufacturing costs are the primary consideration for countries when considering whether to import foreign goods.

Source : PowerScore

Kurtosis · Answer

Question Type: Inference

We must find an answer option that is true based on the given information.

(A) Customs taxes are less in Country K than they are in Country P. - Incorrect. Out of scope.

(B) It takes 15 percent more time to manufacture a microchip in Country K than it does in Country P. - Incorrect. Out of scope.

(C) The taxes and fees associated with importing microchips from Country P to Country K are less than 15 percent of the cost of manufacturing those microchips in Country K. - Correct. Manufacturing cost is 15% greater in K. So if import of microchips has to be cheaper, the import duty and and delivery fee must be less than 15% of the manufacturing cost in K.

(D) Importing microchips from Country P will reduce employment opportunities in manufacturing by 15 percent in Country K. - Incorrect. Out of scope.

(E) Manufacturing costs are the primary consideration for countries when considering whether to import foreign goods. - Incorrect. This is not the sole consideration. The argument considers other factors such as customs and delivery fee and doesn't prioritize one over the other.

Answer: C

guptarahul · Answer

(A) Customs taxes are less in Country K than they are in Country P. Out of scope.

(B) It takes 15 percent more time to manufacture a microchip in Country K than it does in Country P. Out of scope.

(C) The taxes and fees associated with importing microchips from Country P to Country K are less than 15 percent of the cost of manufacturing those microchips in Country K. - Correct. Manufacturing cost is 15% greater in K. So if import of microchips has to be cheaper, the import duty and and delivery fee must be less than 15% of the manufacturing cost in K.

(D) Importing microchips from Country P will reduce employment opportunities in manufacturing by 15 percent in Country K. - Out of scope.

(E) Manufacturing costs are the primary consideration for countries when considering whether to import foreign goods. - Incorrect. This is not the sole consideration. Moreover avoid strong words like Primary.

Answer: C

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KUDOS pls

tyildirim92 · Answer

It seems like even C is a problematic choice, which makes the question wrong. Please note the following reasoning and all figures below are in line with the prompt,

Cost in Country K, K:$115
Cost in CountRy P, P:$100

According to choice C, the taxes and fees associated with importing microchips from Country P to Country K are less than 15 percent of the cost of manufacturing those microchips in Country K, namely less than 15/100*115=$17.25. Ups, that's bad. Let us say the taxes and fees associated with importing microchips from Country P to Country K are exactly 17. In such a case, because 17 is greater than 15,(15=the real cost difference according to above), it would not be wise to say even after customs taxes and delivery fees are considered, it is still cheaper for Country K to import microchips from Country P than to have the microchips manufactured domestically.

My humble suggestion is that choice C be replaced with the below sentence.

The taxes and fees associated with importing microchips from Country P to Country K are less than 15 percent of the cost of manufacturing those microchips in Country   P.

Experts,  GMATNinja ,  VeritasKarishma ,  MentorTutoring  please confirm my reasoning,

Everyone, please kudos if you find this post helpful!

AndrewN · Answer

Hello,  tyildirim92 , and thank you for tagging me. I can appreciate the point you are making; at the same time, I think you are working against the  given fact  from the prompt that  it is still cheaper for Country K to import microchips from Country P than to have the microchips manufactured domestically . Your aim is not to disprove the established condition, but to take it as true and assess the answer choices with such a premise in mind. So, provided it  is , in fact, cheaper for K to import microchips than to manufacture them, using the same numbers you have outlined above, we can assume that the taxes and fees for importing microchips must be less than $15, without doing any math. Perhaps for the more mathematically inclined test-taker, your proposed change of K to P would make more sense, but GMAC™ makes it quite clear that it is  conclusions , not premises, that are to be weakened, if anything at all. Besides, an amount lower than $15 would still qualify as being  less than 15 percent of the cost of manufacturing those microchips in Country K . It might not be as satisfying an answer, but with the information presented in the passage, and considering the position GMAC™ has adopted regarding premises, choice (C) is fine as is.

- Andrew

KarishmaB · Answer

Taking your figures,

Consider this: The premises tell us that taxes etc are less than $15. (Premise: it is still cheaper for Country K to import microchips)
So we KNOW that taxes are less than $15.

What can we conclude? 
Can we conclude that taxes etc are less than $17.25 too? Of course. It must be true. If the taxes are less than $15, they will certainly be less than $17.25 too and hence option (C) will be correct.

candyhouse151 · Answer

The given information states that the cost of manufacturing microchips in Country K is 15 per cent greater than in Country P. Despite considering customs taxes and delivery fees, it is still more economical for Country K to import microchips from Country P rather than produce them domestically.

- (A) Customs taxes are less in Country K than they are in Country P.
 - This conclusion is not necessarily supported by the given information. We only know that importing is cheaper, but we don't have direct information about customs tax rates.
- (B) It takes 15 per cent more time to manufacture a microchip in Country K than it does in Country P.
 - The time required for manufacturing is not mentioned in the given information. Hence, this conclusion cannot be inferred.
 -(C) The taxes and fees associated with importing microchips from Country P to Country K are less than 15 per cent of the cost of manufacturing those microchips in Country K.
 - This conclusion is supported by the information. If importing is cheaper despite the 15 per cent higher manufacturing cost, it implies that the taxes and fees associated with importing are less than 15 per cent of the domestic manufacturing cost. 
- (D) Importing microchips from Country P will reduce employment opportunities in manufacturing by 15 per cent in Country K.
 - The information does not provide any insight into employment opportunities. Therefore, this conclusion cannot be drawn.
- (E) Manufacturing costs are the primary consideration for countries when considering whether to import foreign goods.
 - The information does not specifically address the primary considerations for countries when deciding to import. Hence, this conclusion cannot be directly inferred.

Therefore, the most strongly supported conclusion is (C): The taxes and fees associated with importing microchips from Country P to Country K are less than 15 per cent of the cost of manufacturing those microchips in Country K.

The cost of manufacturing microchips in Country K is 15 percent greate

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The cost of manufacturing microchips in Country K is 15 percent greate

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