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09 Apr 2020, 02:14
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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
79% (01:28) correct
21%
(01:43)
wrong
based on 521
sessions
History
Date
Time
Result
Not Attempted Yet
Politician: A government that taxes incomes at a rate of 100 percent will generate no revenue because all economic activity will cease. So it follows that the lower the rate of income tax, the more revenue the government will generate by that tax.
Economist: Your conclusion cannot be correct, since it would mean that an income tax of 0 percent would generate the maximum revenue.
Which one of the following argumentative strategies is used by the economist in responding to the politician?
(A) stating a general principle that is incompatible with the conclusion the politician derives
(B) providing evidence that where the politician’s advice has been adopted, the results have been disappointing
(C) arguing that the principle derived by the politician, if applied in the limiting case, leads to an absurdly false conclusion
(D) undermining the credibility of the politician by openly questioning the politician’s understanding of economics
(E) attacking the politician’s argument by giving reason to doubt the truth of a premise
09 Dec 2020, 20:49
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tinbq
Let's start by breaking down the arguments of the Politician and the Economist.
- Politician: A government that taxes incomes at a rate of 100 percent will generate no revenue because all economic activity will cease. So it follows that the lower the rate of income tax, the more revenue the government will generate by that tax.
The Politician's conclusion is that the lower tax rates are, the higher tax revenue will be. The premise cited is that a tax rate of 100% would result in zero revenue because all economic activity would shut down.
- Economist: Your conclusion cannot be correct, since it would mean that an income tax of 0 percent would generate the maximum revenue.
The Economist disagrees with the Politician. In fact, the Economist's conclusion is that the Politician's conclusion is wrong. But that's a bit confusing, so let's try to untangle it a bit. The Politician's conclusion is that the lower tax rates are, the higher tax revenue will be. The Economist's conclusion is that this statement is false.
What does the Economist use to support this conclusion? He or she says that the Politician's conclusion would mean that a 0 percent tax would bring in the highest possible revenue for the government. It seems that this follows from the Politician's conclusion: a 0 percent tax is the lowest tax rate possible and the Politician concluded that the lower the tax rate, the higher tax revenue will be.
That's the only thing that the Economist explicitly says. How does this help the Economist reach his or her conclusion that the Politician's conclusion is wrong? Let's think about the Economist's hypothetical situation for a minute. If a tax rate is 0 percent, how much tax revenue is it going to bring in? None! Hopefully that's pretty clear:if a governments doesn't charge any taxes then it isn't going to have any tax revenue. This directly contradicts the results of the Politician's conclusion, so something has to be wrong with that conclusion. That's why the Economist is concluding that the Politician is wrong.
With that, let's take a look at the question and start analyzing the answer choices. We're looking for the answer choice that captures how the Economist responds to the Politician.
Quote:
The Economist looked at a very specific situation (a 0 percent tax rate) and points out that the Politician's conclusion doesn't make sense in this situation. That doesn't sound like the Economist stated "a general principle," so we can eliminate answer choice (A).
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Does the Economist cite any real world evidence? No. There's no discussion of an actual situation where taxes went up or down or where revenue went up or down. So we an eliminate answer choice (B).
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There's some technical jargon in this answer choice ("if applied in the limiting case") that can make evaluating it more difficult than necessary. I'll ignore the technical jargon at first and then circle back to what it means afterwards.
Does the economist proceed by "arguing that the principle derived by the Politician . . . leads to an absurdly false conclusion"? That's exactly what the Economist does! He or she takes the Politician's conclusion ("the principle derived by the Politician") and shows that this would mean that a 0 percent tax rate would lead to the maximum government revenue possible. But that's "an absurdly false conclusion!" So answer choice (C) looks good.
A limiting case is the mathematical concept of looking at the most extreme values (the largest and smallest values) possible. That's exactly what the Economist did: he or she looked at the case of a 0 percent tax -- the lowest tax possible.
Quote:
The Economist is pointing out a flaw in the Politician's economic reasoning. That probably calls into question the politician's understanding of economics. And that may undermine the politician's credibility. So answer choice (D) looks at least decent at first glance. But we need to slow down and read every word of the answer choice carefully. Did the Economist openly question the Politician's understanding of economics? The Economist doesn't explicitly question the Politician's understanding at all--he or she sticks to the argument and to logic the whole time. So answer choice (D) is out.
Quote:
This one is a little tricky. We need to pay careful attention to exactly what the Economist's argument did. It took the Politician's conclusion and showed that it would result in a contradiction. Does that mean the Economist cast doubt on the truth of the Politician's premise? Not necessarily.
Another way to look at this answer choice is to look back at what the Politician's premise was: a tax rate of 100% will generate zero revenue. Do we know whether the Economist agrees or disagrees with this premise? We don't (although my sense is that the Economist probably agrees). So the Economist didn't argue by calling this premise into question. So we can eliminate answer choice (E).
By process of elimination that leaves us with answer choice (C).
I hope that helps!
General Discussion
09 Apr 2020, 03:59
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Quote:
argument
p= 100% rate would cease activity and generate no revenue
= so the lower the rate the higher the revenue generated
e= not true; if rate is 0, then revenue is also 0
ans (C) if P's principle was true, than 0 rate would max revenue, in fact it zero's revenue!
