Adjusted for inflation, the income earned from wool sales by a certain

Question

Adjusted for inflation, the income earned from wool sales by a certain family of Australian sheep farmers grew substantially during the period from 1840 to 1860. This is because the price for wool sold on the international market was higher than the price paid on domestic markets and the percentage and amount of its wool that this family sold internationally increased dramatically during that period. But even though the family generated more income from selling their wool, they failed to enjoy a commensurate increase in prosperity.

Which one of the following would, if true, help most to resolve the apparent paradox described above?

(A) At the end of the 1800s, prices in general in Australia rose more rapidly than did the wholesale price of wool sold domestically.
(B) The prices of wool sold to domestic markets by Australian sheep farmers decreased dramatically during the period in question.
(C) The international and domestic prices for mutton, sheepskins, and certain other products produced by all Australian sheep farmers fell sharply during the period in question.
(D) Competition in wool sales increased during the period in question, leaving Australian wool producers in a less favorable position than previously.
(E) Among Australian sheep farmers, the percentage who made their living exclusively from international wool sales increased significantly during the period in question.

Source: LSAT

US09 · Answer

Prethinking : The income from wool sales adjusted against inflation increased sharply but the family still could not enjoy prosperity. Possible causes can be that the family had debts from previous business transactions that it had to pay, the family might had an unexpected issue such as accident or health problem to cope up with financially, the family might had lost more in other business than it gained from this business..

(A) At the end of the 1800s, prices in general in Australia rose more rapidly than did the wholesale price of wool sold domestically. The question stem mentions "income from wool sales (adjusted against inflation) increased dramatically". Hence, this option is  irrelevant.  
(B) The prices of wool sold to domestic markets by Australian sheep farmers decreased dramatically during the period in question.  Irrelevant . Amount of wool sold internationally increased dramatically and so did the income from wool sales. 
(C) The international and domestic prices for mutton, sheepskins, and certain other products produced by all Australian sheep farmers fell sharply during the period in question. In line with prethinking, hold.
(D) Competition in wool sales increased during the period in question, leaving Australian wool producers in a less favorable position than previously. Even if the competition increased, the fact is given that the family's income from wool sales increased. Hence,  incorrect. 
(E) Among Australian sheep farmers, the percentage who made their living exclusively from international wool sales increased significantly during the period in question. The family clearly did not belong to this category.  Out of scope.

Therefore, C.

Abhishek009 · Answer

Keep in mind the highlighted parts in the Stimulus and the option !!

The certain family in question , must also be a memeber of the group of the Australian sheep farmers , producing mutton, sheepskins, and other products and although wool sales grew substantially, the sales of other items fell sharply, that offsetted the profit gained from sales of Sheep wool.

Hence, correct Answer has to be (C)

thinkTheta · Answer

C.

Total income of Aus. sheep farmers = income from wool + mutton + sheepskin + other products

price for wool went from 10 to 100, and for all others from 100 to 10

Original Total income = 10 + 100 + 100 + 100 = 310
New Total Income = 100 + 10 + 10 + 10 = 130

Hence, C.

GMATNinjaTwo · Answer

Thanks for the replies!
 
To post additional questions not already addressed in this thread, feel free to use the  request verbal experts' reply  button.

JatinBhandari1 · Answer

Hope your preparation is going well. Let us look for the solution to the following question
Paradox: Even though the family generated more income from selling their wool, they failed to enjoy a commensurate increase in prosperity. The answer should provide a situation which can explain the contradiction which exists. It should be remembered that the correct answer should not worsen the contradiction, should not deal with only one aspect of the paradox and should not be out of the scope of the discussion.
A: Does not talk about the period in question
B: If the family in question obtained greater income from international sales, for which the prices were also higher, it would be less affected due to domestic sales
C: Even if wool prices were higher, a sharp decline in prices of other commodities produced from sheep would lower the family’s profits; Correct answer
D: Less favorable with regard to what is unclear
E: Not specified that the family in question made their living exclusively from international wool sales
Keep practicing; consistency is the key to do well in verbal.
All the best!!
PythaGURUS Faculty Team

mysterymanrog · Answer

Rephrase Question: Why would it be that, despite an increase in wool sales, the family's economic position not change?

A) Can be readily eliminated, as we have already adjusted for inflation. Out.

B) Decent choice. Keep.
 
C) Also a contender, keep.
 
D) This is not really relevant to the question at hand. Sure, it's possible that competition may have increased, but it does not explain why the Farmer's family would not be able to benefit from their higher wool revenue. Out.

E) This is essentially D, just reworded. Out.

B vs. C

B fails because it says that the domestic price decreased. It is stated that the Farmer's family was able to have a higher revenue from wool. So even if this were true, it does not explain the paradox.

C, on the other hand, is much better. C directly tells us that all the other products had drastic drops in prices. This implies that, even if the wool revenue increased, all their other products revenues dropped and therefore the farmer would be more or less in the same financial position as before the wool revenue increased.

Final Answer must be C.

desertEagle · Answer

Not given - Australian Farmer Family(AFF) dealt exclusively in sheep wool. So, He could be dealing in other sheep products as well as other general products which may have had posted losses, negating the gains made in wool business

If sales has increased (as given in the question stem), then profit must be more. Competitiveness will not have any impact as it is already given that sales increased.

C is correct.

VerbalBot · Answer

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Adjusted for inflation, the income earned from wool sales by a certain

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