While there is no blueprint for transforming a largely government-cont

Question

While there is no blueprint for transforming a largely government-controlled economy into a free one, the experience of the United Kingdom since 1979 clearly shows one approach that works: privatization, in which state-owned industries are sold to private companies. By 1979, the total borrowings and losses of state-owned industries were running at about £3 billion a year. By selling many of these industries, the government has decreased these borrowings and losses, gained over £34 billion from the sales, and now receives tax revenues from the newly privatized companies. Along with a dramatically improved overall economy, the government has been able to repay 12.5 percent of the net national debt over a two-year period.

In fact, privatization has not only rescued individual industries and a whole economy headed for disaster, but has also raised the level of performance in every area. At British Airways and British Gas, for example, productivity per employee has risen by 20 percent. At Associated British Ports, labor disruptions common in the 1970s and early 1980s have now virtually disappeared. At British Telecom, there is no longer a waiting list—as there always was before privatization—to have a telephone installed.

Part of this improved productivity has come about because the employees of privatized industries were given the opportunity to buy shares in their own companies. They responded enthusiastically to the offer of shares: at British Aerospace, 89 percent of the eligible work force bought shares; at Associated British Ports, 90 percent; and at British Telecom, 92 percent.  When people have a personal stake in something, they think about it, care about it, work to make it prosper.  At the National Freight Consortium, the new employee-owners grew so concerned about their company’s profits that during wage negotiations they actually pressed their union to lower its wage demands.

Some economists have suggested that giving away free shares would provide a needed acceleration of the privatization process. Yet they miss Thomas Paine’s point that  “what we obtain too cheap we esteem too lightly.”  In order for the far-ranging benefits of individual ownership to be achieved by owners, companies, and countries, employees and other individuals must make their own decisions to buy, and they must commit some of their own resources to the choice.   1 
 D 
1. According to the passage, all of the following were benefits of privatizing state-owned industries in the United Kingdom EXCEPT:

(A) Privatized industries paid taxes to the government.
(B) The government gained revenue from selling state-owned industries.
(C) The government repaid some of its national debt.
(D) Profits from industries that were still state owned increased.
(E) Total borrowings and losses of state-owned industries decreased.

2 
 A 
2. According to the passage, which of the following resulted in increased productivity in companies that have been privatized?

(A) A large number of employees chose to purchase shares in their companies.
(B) Free shares were widely distributed to individual shareholders.
(C) The government ceased to regulate major industries.
(D) Unions conducted wage negotiations for employees.
(E) Employee-owners agreed to have their wages lowered.

3 
 E 
3. It can be inferred from the passage that the author considers labor disruptions to be

(A) an inevitable problem in a weak national economy
(B) a positive sign of employee concern about a company
(C) a predictor of employee reactions to a company’s offer to sell shares to them
(D) a phenomenon found more often in state-owned industries than in private companies
(E) a deterrence to high performance levels in an industry

4 
 B 
4.The passage supports which of the following statements about employees buying shares in their own companies?

(A) At three different companies, approximately nine out of ten of the workers were eligible to buy shares in their companies.
(B) Approximately 90 percent of the eligible workers at three different companies chose to buy shares in their companies.
(C) The opportunity to buy shares was discouraged by at least some labor unions.
(D) Companies that demonstrated the highest productivity were the first to allow their employees the opportunity to buy shares.
(E) Eligibility to buy shares was contingent on employees’ agreeing to increased work loads.

5 
 C 
5. Which of the following statements is most consistent with the principle described in lines 30-32  When people have a personal stake in something, they think about it, care about it, work to make it prosper. ]?

(A) A democratic government that decides it is inappropriate to own a particular industry has in no way abdicated its responsibilities as guardian of the public interest.
(B) The ideal way for a government to protect employee interests is to force companies to maintain their share of a competitive market without government subsidies.
(C) The failure to harness the power of self-interest is an important reason that state-owned industries perform poorly.
(D) Governments that want to implement privatization programs must try to eliminate all resistance to the free-market system.
(E) The individual shareholder will reap only a minute share of the gains from whatever sacrifices he or she makes to achieve these gains.

6 
 E 
6. Which of the following can be inferred from the passage about the privatization process in the United Kingdom?

(A) It depends to a potentially dangerous degree on individual ownership of shares.
(B) It conforms in its most general outlines to Thomas Paine’s prescription for business ownership.
(C) It was originally conceived to include some giving away of free shares.
(D) It has been successful, even though privatization has failed in other countries.
(E) It is taking place more slowly than some economists suggest is necessary.

7 
 A 
7. The quotation in lines 39  “what we obtain too cheap we esteem too lightly.” ] is most probably used to

(A) counter a position that the author of the passage believes is incorrect
(B) state a solution to a problem described in the previous sentence
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments
(D) point out a paradox contained in a controversial viewpoint
(E) present a historical maxim to challenge the principle introduced in the third paragraph

nitya34 · Accepted Answer

will try to follow the suggestion
thanks for the same.
2 LSAT and 1 GMAT type, i will try to post now on

btw, OAs are the same as both of you did
  DAEB CEA

+++++++++++++++

my take was
DAEB BCE
was not sure abt the 2nd last Q

----------
Questions 84-90 refer to the passage on page 50
84. According to the passage,all of the following were benefits of privatizing state-owned industries in the United Kingdom EXCEPT:
(A) Privatized industries paid taxes to the government.
(B) The government gained revenue from selling state-owned industries.
(C) The government repaid some of its national debt.
(D) Profits from Industries that were still state-owned increased.
(E) Total borrowings and losses of state-owned industries decreased.
Supporting ideas
This question begins with the phrase according to the passage,indicating that it can be answered using facts stated in the passage.The first paragraph fists the benefits of privatization.Use the process of elimination and check the five possible answer choices against the benefits described in fines 8—12.The point that is NOT discussed in the passage is the correct answer.
A Lines 1 1-12 discuss tax revenues.
B Lines 10-1 1 discuss revenue from the sales.
C Lines 14-16 discuss debt repayment.
D Correct.Profits from state—owned industries are not discussed.
E Lines 9—10 discuss decreased borrowings and losses.
The correct answer is D.

85. According to the passage,which of the following resulted in increased productivity in companies that have been privatized?
(A) A large number of employees chose to purchase shares in their companies.
(B) Free shares were widely distributed to Individual shareholders.
(C) The government ceased to regulate major industries.
(D) Unions conducted wage negotiations for employees.
(E) Employee—owners agreed to have their wages lowered.
Supporting ideas
This question is based on information explicitly stated in the passage.The second paragraph describes the increased productivity, and the third paragraph begins by stating one reason for it:employees of privatized industries were given the opportunity to buy shares in their own companies (fines 29-31).The paragraph also cites the high percentage of employees buying shares in three privatized companies,supporting the idea that many employees bought shares.
A Correct.Productivity increased after employees became shareholders in their companies.
B The theoretical advantages and disadvantages of free shares are discussed(fines 43-52),but the passage does not say that any were given away.
C The passage does not examine governmental regulation.
D The passage does not analyze the relation between wages and productivity.
E Lines 39—-42 cite one example of employee-owner willingness to accept lower wages,but productivity.
The correct answer is A.

86. It can be inferred from the passage that the author considers labor disruptions to be
(A) an inevitable problem in a weak national economy
(B) a positive sign of employee concern about a company 
(C) a predictor of employee reactions to a company's offer to sell shares to them
(D) a phenomenon found more often in state-owned industries than in private companies
(E) a deterrence to high performance levels in an industry
Inference
This question states that an inference is required; this inference is based on material presented in the second paragraph.To demonstrate that privatization has raised the level of performance in every area, the author gives three examples (1ines 20-27).One example is the disappearance of labor disruptions,once common.If the absence of 1abor disruptions raises the 1evel of performance.then the author must believe that the presence of labor disruptions impedes a high level of performance.
A The author does not link labor disruptions with a weak national economy.
B The author does not interpret labor disruptions in a positive fight.
C The author does not identify labor disruptions as a predictor of employees’ responses to opportunities to buy a company’s shares.
D Labor disruptions in state-owned and private industries are not compared.
E Correct.The author implies that labor disruptions interfere with high levels of performance in industry.
The correct answer is E.

87.The passage supports which of tile following statements about employees buying shares in their own companies ?
(A) At three different companies,approximately nine out of ten of the workers were eligible to buy shares in their companies.
(B) Approximately 90 percent of the eligible workers at three different companies chose to buy shares in their companies.
© The opportunity to buy shares was discouraged by at least some labor unions.
(D) Companies that demonstrated the highest productivity were the first to allow their employees the opportunity to buy shares
(E) Eligibility to buy shares was contingent on employees’ agreeing to increased work loads.
Supporting ideas
Check each statement by comparing it to the information presented in the passage.Only one statement is supported.The third paragraph presents the percentages of the eligible employees who purchased shares in their companies:89 percent at one company,90 percent at a second,and 92 percent at a third(1ines 32-35).Thus,it is true that roughly 90 percent of the eligible work force at three different companies bought shares in their companies once they were given the opportunity to do so.
A The passage cites the percentages of the eligible employees who bought shares,not the percentages of the total work force who were eligible.
B Correct.The passage shows that roughly 90 percent of the eligible employees at three different companies bought shares in their companies.
C The passage does not show the attitude of labor unions toward employee share buying.
D The passage offers no evidence that companies with high productivity were the first to offer shares to their employees.
E The passage does not show eligibility to be dependent on increased workload.
The correct answer is B.

88. Which of the following statements is most consistent with the principle described in lines 36-38?
(A) A democratic government that decides it is inappropriate to own a particular industry has in no way abdicated its responsibilities as guardian of the public interest.
(B) The ideal way for a government to protect employee interests is to force companies to maintain their share of a competitive market without government subsidies.
(C) The failure to harness the power of self-interest is an important reason that state-owned industries perform poorly.
(D) Governments that want to implement privatization programs must try to eliminate all resistance to the free-market system.
(E) The individual shareholder will reap only a minute share of the gains from whatever sacrifices he or she makes to achieve these gains.
Application
First identify the principle involved,and then find the statement that is most compatible with that principle.Lines 36-38 argue that having a personal stake in a business makes employees work to make it prosper.When there is no personal stake,or self-interest,involved,employees do not have the same incentive to work hard to make their industry prosper.Thus,the poor performance of state-owned industries can be ascribed in part to the 1ack of motivation employees suffer when they have no personal stake in the business.
A The principle involves a personal,rather than governmental,relationship.
B Self-interest may inspire people to do more;government coercion is not consistent with this principle.
C Correct.State-owned industries perform poorly in part because employees do not have the powerful motivation of self-interest.
D The principle has to do with the motivation of individuals, not governments.
E Lines 36-38 describe the principle of self- interest,not self-sacrifice.
The correct answer is C.

89. Which of the following can be inferred from the passage about the privatization process in the United Kingdom?
(A) It depends to a potentially dangerous degree on individual ownership of shares.
(B) It conforms in its most general outlines to Thomas Paine’s prescription for business ownership.
© It was originally conceived to include some giving away of free shares。
(D) It has been successful,even though privatization has failed in other countries.
(E) It is taking place more slowly than some economists suggest is necessary.
Inference
Answering this question requires looking at each possible inference to see if it is supported somewhere in the passage.Support for the inference about the pace of privatization is provided by the suggestion of some economists that giving away flee shares would provide a needed acceleration of the privatization process(fines44—45).If privatization needs to be accelerated,then it must be going too slowly, at least according to these economists.
A The passage does not allude to any danger in individual ownership of shares.
B Paine is quoted only in reference to receiving flee shares as opposed to buying shares;also,the process of privatization had occurred before employees bought shares in the newly privatized companies.
C No evidence supports the distribution of free shares as part of the plan to privatize.
D The failure of privatization in other countries is not mentioned.
E Correct.The economists’ suggestion comes from what they see as the need to speed up a process that is currently taking too long.
The correct answer is E.

90. The quotation in lines 46-47 is most probably used to
(A) counter a position that the author of the passage believes is incorrect
(B) state a solution to a problem described in the previous sentence
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments
(D) point out a paradox contained in a controversial viewpoint
(E) present a historical maxim to challenge the principle introduced in the third paragraph
Logical structure
Looking at the quotation’s context leads to an understanding of why the quotation was used. Paine’ s quotation offers a concise and time-honored counterargument to the view voiced in the preceding sentence.The economists suggest giving away free shares,but the author notes that these economists are forgetting that,according to Paine,people do not value what they get too cheaply.The author uses the quotation to show the basic error in the economists’ thinking.
A Correct.The author uses Paine's quotation as an apt counter to the economists’ suggestion.
B The quotation attacks the solution posed in the previous sentence.
C The author agrees with Paine,as is evident in the final 1ines of the passage.
D The author implies that a viewpoint is ill advised.but does not say it is controversial.
E Paine's maxim does not challenge the principle of self-interest.
The correct answer is A.
______________________-

i got DAEBBCE(last 3 mistakes)

Chelsea212 · Answer

I see there's a few doubts on Q3, Q6 and Q7. While I'm not claiming to be an expert by any stretch of the imagination, I have come to value this forum a lot during my GMAT Prep, and have found contributing to the forum an important part of both my learning, as well as the broader communities. I'll start by touching on question 3 - hope this helps!

A few thoughts on tackling RC in general.

1. I always, always,  always  - rephrase the passage as I read.   I think every sentence or two, I do this unconsciously; it's 'active' reading in practice. Having this reflex and improving your ability to rephrase and simplify a passage is incredibly important in being able to have a general roadmap of the passage as a whole. As you practice this skill, the 'what's the point of the passage?' questions should become very intuitive. It's not easy though and at first it's very easy to read the passage as 'fact, fact, fact' so I encourage you to be super vigilant of how you read. I know it took me a while!

2. For every question, always go back to the passage.   Whether the question is specific and asks you to make an inference, or is general and asks you what the overall tone is, it's important to go  back to the passage.  The third question of this RC is, in my opinion, a prime example of how you can become easily confused if you do not return to the passage.

3. Always find 4 wrong answers!   Like  GMATNinja  has emphasized, this needs to become your motto. With every question I do, whether I got the answer right or wrong, whether I found it easy or hard, I go back and ensure that I am able to justify each of answer choices (A) through (E). It's often times easy to say "oh that question was so easy" and look at just the questions that challenged you; however, I've found that scrutinizing each answer choice has reinforced my ability to pick out patterns of typical 'trap' answers.

That said, I'll go into how I was able to answer some of the challenging questions in this set. What is challenging for me, may or may not be for you, but this is just what I found from previous discussions to be of noteworthy mention.

Step 1: First thing I do - I go   back to the passage   . In this case, that is the 2nd paragraph. I already have the general road map of this passage in my head, and I know I'll find my answer here. I look at the opening sentence and see that it states two things that privatization has done: rescue industries/economies, and raise performance in every area within industries/economies. The next sentence lists examples of how performance was improved in various industries.

Step 2: Find 4 wrong answers - this is not the same as finding 1 right answer!  
(A) an inevitable problem in a weak national economy -  Nowhere does the passage indicate that the author considers labor disruptions to be inevitable in any economy. That's it.  Do not linger on this  and think "oh well...it's probably true in weak economies... there probably are more labor disputions in a weak national economy and yea...it's probably inevitable given crappy economic circumstances." Remember that you're working within a 'closed environment' for RC.

(B) a positive sign of employee concern about a company -  the author discusses employee concern about a company in the third paragraph when discussing stock ownership and union wage discussions; however, the author does not do so in the context of labor disruptions

(C) a predictor of employee reactions to a company’s offer to sell shares to them -  this option claims the author considers labor disruptions to be a reaction to a company's offer to sell them shares... the author does not do this. This option has mashed together concepts from paragraphs 2 and 3 in a nonsensical way

(D) a phenomenon found more often in state-owned industries than in private companies -  I think that people are most tempted by this option because it draws on what is a very logical conclusion. Yes, it's probably true that you find this phenomenon - labor disruptions - more often in state-owned industries than in private companies. Unfortunately, drawing on your assumption and bringing your thoughts into what is supposed to be a 'closed and controlled environment' in RC, more often than not leads to wrong answers. The author does not, in any part of paragraph 2 - the relevant portion - indicate that you'd find labor disputes more often in state-owned vs privately-owned companies.

You have to stop yourself before you even get off track and think 'oh well labor unions are probably more common in state-owned operations like Transit Systems, and ugh yes those are definitely very predisposed to labor disruptions. UGH Canada POST!! See, that what I did right there, is allow my thoughts to color RC. Tsk, tsk, a big fat NO NO.

(E) a deterrence to high performance levels in an industry -  Bingo. The structure of the sentences in paragraph 2 allow you to infer (i.e. from the given text, make a directly conclusion without making any additional assumptions) that labor disruptions are a deterrence to high performance levels. The first sentence states that privatization has saved industries/economies, and the second gives examples of how specific event have various industries have been saved.

The statement that "Associated British Ports, labor disruptions common in the 70s and 80s have now virtually disappeared", in the context of paragraph 2, allows you to infer that the disappearance of labor disputes improved performance levels, which is a simplified way to saying that the disappearance was "a deterrence to high performance levels in an industry"

Hope this helps!

mbaiseasy · Answer

84． According to the passage，all of the following were benefits of privatizing state—owned industries in the United Kingdom EXCEPT：

Everything below has been mentioned in the passage EXCEPT for profits from industries.
More than 50% of the passage is even dedicated to increase in productivity, the benefits of shares to employees... 
Profit increase is a different thing from Productivity Increase... I see this is more of a trap...
ANSWER: D

85． According to the passage，which of the following resulted in increased productivity in companies that have been privatized?

The key point of the discussion is shares to employees in the companies... This makes B incorrect since it just mentioned individual shareholders (either internal or external to the firm). C,D and E are obviously far fetch from what is mentioned in the passage.

ANSWER: A

ANSWER: A

86. It can be inferred from the passage that the author considers labor disruptions to be
  Although it is not directly mentioned, but by evaluating the line before the sentence that mentions labor disruptions... We can infer that this factor is considered a part of evaluating increase in productivity (thus high performance).
 ANSWER: E

87. The passage supports which of the following statements about employees buying shares in their own companies?

From the passage, it says: They responded enthusiastically to the offer of shares：at British Aerospace，89 percent of the eligible work force bought shares；at Associated British Ports，90 percent；and at British Telecom，92 percent．
ANSWER: B

88. Which of the following statements is most consistent with the principle described in lines 36-38?
  I made a choice between C and E because the other choices are easy to cancel out. What's wrong with E? Well in here it says whatever you do you will reap only a minute share... This is obviously close to the idea of you reap what you sow BUT ONLY A MINUTE ruins the actual point... ANSWER: C

89． Which of the following can be inferred from the passage about the privatization process in the United Kingdom?

90．The quotation in lines 46-47 is most probably used to
   A is obviously the answer...

iamdp · Answer

Hi 
Can you please explain Q:6. I didn't get it, how is it E..?

Gnpth · Answer

Hi,

Here is the OE. Its an OG question.

Answering this question requires looking at each possible inference to see if it is supported somewhere in the passage. Support for the inference about the pace of privatization is provided by the suggestion of some economists that giving away free shares would provide a needed acceleration of the privatization process (lines 43–45). If some economists think privatization needs to be accelerated, then it must be going too slowly, at least according to these economists.

A The passage does not allude to any danger in individual ownership of shares.
B Paine is quoted only in reference to employees’ receiving free shares as opposed to buying shares; also, the process of privatization had occurred before employees bought shares in the newly privatized companies.
C No evidence supports the distribution of free shares as part of the United Kingdom’s plan to privatize.
D A phrase in line 4, one approach that works, suggests that perhaps there were other approaches that did not work; however, nowhere does the passage indicate that privatization has not worked in other countries.
E Correct. The economists’ suggestion comes from what they see as the need to speed up a process that is currently taking too long.

The correct answer is E.

AryamaDuttaSaikia · Answer

The highlighted text mentions that if we obtain too cheap then we esteem too lightly. This text is opposing the statement that free shares would provide the needed acceleration. Author doesn't support this point. (and that's why mentions the Thomas Paine's point in the highlighted text)

This idea is highlighted in option A. Rest all are wrong.

This idea is highlighted in option A. Rest all are wrong.

aragonn · Answer

P1- how to government-controlled economy into a free one; example is given -privatization in uk.
P2- privatization has done what? examples.
P3- part of success come from factor X. examples and care.
P4- why factor x for free is not a good idea. and solution/improvements.
main idea - privatization - impacts - factorx - how to improve X.
Tone - moderate, informative,

1. According to the passage, all of the following were benefits of privatizing state-owned industries in the United Kingdom EXCEPT:
anchor - benefits of privatizing

(A) Privatized industries paid taxes to the government. - yes, p1
(B) The government gained revenue from selling state-owned industries. - yes, p1
(C) The government repaid some of its national debt. - yes, p1
(D) Profits from industries that were still state owned increased. - no, should be the answer.
(E) Total borrowings and losses of state-owned industries decreased. - yes, p1

------------------------------------------

2. According to the passage, which of the following resulted in increased productivity in companies that have been privatized?
Pre-think - companies that have been privatized, talk about increased productivity. talked about it in p2 and p3. cause of this productivity increased.

(A) A large number of employees chose to purchase shares in their companies. - yes
(B) Free shares were widely distributed to individual shareholders. - no
(C) The government ceased to regulate major industries. - no
(D) Unions conducted wage negotiations for employees. - no
(E) Employee-owners agreed to have their wages lowered. - no

------------------------------------------

3. It can be inferred from the passage that the author considers labor disruptions to be
lines - but has also raised the level of performance in every area. At British Airways and British Gas, for example, productivity per employee has risen by 20 percent. At Associated British Ports, labor disruptions common in the 1970s and early 1980s have now virtually disappeared. At British Telecom, there is no longer a waiting list—as there always was before privatization—to have a telephone installed.

pre-think - cause of increased productivity, labor disruptions disappeared.

(E) a deterrence to high performance levels in an industry - yes

-------------------------------------------
4.The passage supports which of the following statements about employees buying shares in their own companies?
P3 + p4 defines about it.

(A) At three different companies, approximately nine out of ten of the workers were eligible to buy shares in their companies. - no
(B) Approximately 90 percent of the eligible workers at three different companies chose to buy shares in their companies. - may be
(C) The opportunity to buy shares was discouraged by at least some labor unions. - no
(D) Companies that demonstrated the highest productivity were the first to allow their employees the opportunity to buy shares. - no
(E) Eligibility to buy shares was contingent on employees’ agreeing to increased work loads. - no

B is best of the lot.
--------------------------------------------

5. Which of the following statements is most consistent with the principle described in lines 30-32  ?
pre-think - As many shares were given to employee, company become the part of there wealth. now people will care for company.

(C) The failure to harness the power of self-interest is an important reason that state-owned industries perform poorly. - correct.
---------------------------------------------

6. Which of the following can be inferred from the passage about the privatization process in the United Kingdom?
P1 + p2

(A) It depends to a potentially dangerous degree on individual ownership of shares. -- no
(B) It conforms in its most general outlines to Thomas Paine’s prescription for business ownership. - that is in p4
(C) It was originally conceived to include some giving away of free shares. - p3
(D) It has been successful, even though privatization has failed in other countries. - no
(E) It is taking place more slowly than some economists suggest is necessary. - yes

----------------------------------------------
7. The quotation in lines 39   is most probably used to

Some economists have suggested that giving away free shares would provide a needed acceleration of the privatization process. Yet they miss Thomas Paine’s point that “what we obtain too cheap we esteem too lightly.” In order for the far-ranging benefits of individual ownership to be achieved by owners, companies, and countries, employees and other individuals must make their own decisions to buy, and they must commit some of their own resources to the choice.

(A) counter a position that the author of the passage believes is incorrect - yes
(B) state a solution to a problem described in the previous sentence - no
(C) show how opponents of the viewpoint of the author of the passage have supported their arguments - no
(D) point out a paradox contained in a controversial viewpoint - no
(E) present a historical maxim to challenge the principle introduced in the third paragraph - No

Chelsea212 · Answer

Continuing on from my previous post, I'll apply the same methodology I use to tackle RC to this question.

1. I always, always, always - rephrase the passage as I read.     We already did this from initially reading the passage. When I was reading the passage, I am always conscious of balancing my pace with my ability to comprehend and i.e. rephrase the passage. This, like many things in life, takes a lot of practice. If you've never run a 10K before, chances are you're not going to be able to do it in 30minutes without a lot of training. This is also a physical - though probably more mentally taxing - task. So approach it with the same degree of rigor, diligence, and training.

2. For every question, always go back to the passage.   This is a broad picture question so instead of going back to the passage for the question itself, you'll need to confirm the inference as you read each answer choice. Remind yourself to color within the lines, so to speak - don't find yourself saying 'this sounds reasonable' and using 'common sense'.

3. Always find 4 wrong answers!   Since this is a broad picture question, I dive straight into the answer choices.
 
(A) It depends to a potentially dangerous degree on individual ownership of shares.  This is targeting paragraph 3. It sounds really tempting because for some reason, and if you did a double take on this, I understand. For some reason, the combination of the fact that this passage is exclusively talking about the benefits of privatization, save one tiny sentence in the final paragraph, makes me think the cautionary 'potentially dangerous' may be right....Anyway, I don't go on feeling. Once I glance at paragraph 3, I see that there is no indication whatsoever of share ownership going cray cray and it being a problematic part of privatization.
 
(B) It conforms in its most general outlines to Thomas Paine’s prescription for business ownership.  This is also another little temptress. First, it refers to a quote from the passage so it is an easy grab. It's also a bit confusing because it reads a bit more 'abstract' than any of the other choices; it's just not all that straight forward. I think about what this answer choice is saying though and I actually get nowhere.

Thomas Pain's quote "what we obtain too cheap we esteem too lightly" is a fancy way of saying that you need to have some skin in the game and align your own risk/rewards with that of the company for privatization to excel. I don't know if I would really go as far as to call that a 'prescription for business ownership'. Additionally, the author has placed this sentence immediately after a statement that says giving away free shares would speed things up in the process of privatization which is much needed....

I actually don't have the most concrete reason that I can verbalize here for eliminating this idea. When I find myself in this type of limbo situation, I don't let it slow me down. I leave it as a 'maybe', move on, and revisit if needed.

GMATNinja  if you could help verbalize the reason for eliminating this choice, the thread would much appreciate your help!
  
(C) It was originally conceived to include some giving away of free shares.  It would be nice, wouldn't it? This choice picks up the words 'free shares' from the first sentence of the last paragraph: "Some economists have suggested that giving away free shares would provide a needed acceleration of the privatization process". The idea of giving away shares however was never part of any plan in the process of privatization. There's also no discussion of how the process of privatization was originally concieved.

(D) It has been successful, even though privatization has failed in other countries.  Another temptress...because logically it just seems so very reasonable - hey, no one is perfect, right? But remember, we're not applying our opinion to anything. The entire passage talks about the benefits of privatization and the final paragraph just say you have to have some skin in the game for privatization to work well. No where in any part of the passage did the author say that privatization has failed in other countries. The concept of failure was not even touched.

(E) It is taking place more slowly than some economists suggest is necessary.  This is the answer, but I think that most people would not spot it right away and go  'BINGO' . If you look at the final paragraph though, you'll see that there is a sentence that almost explicitly confirms this and is hence a solid inference. First sentence, final paragraph - "Some economists have suggested that giving away free shares would provide a  needed acceleration  of the privatization process". We've scrutinized this in eliminating answer choice (C). So there's a degree of familiarity. The two words "needed acceleration" are explicit enough for you to make the inference that privatization is occurring slowly.

Chelsea212 · Answer

Last but not least, I'll add my commentary on question 7 since it seems that some friends have a few unresolved differences with this one. Again, I am really just expressing my personal thoughts as a part of my own process of interactive learning here. Massive exclaimer as always - I am not an expert. Give me a shout though if you're confused by any of my thoughts or if you'd like to clarify anything. Feedback appreciated and welcome!

1. I always, always, always - rephrase the passage as I read.   Whenever there's a quoted passage that isn't in straight-foward, plain as day English, I rephrase it for myself. This quote is again just a fancy way of saying that you need some skin in the game; you need to align your risk/reward profile with the company for your interests to be on the same path. An everyday example would be a Hedge Fund - the managers will have their own money vested in the fund and will hence have a very strong motivation (as if you needed one) to succeed.

2. For every question, always go back to the passage.   The question is related to a quote so it has straight up told you where your eyes should go so - yay. I quickly remind myself of the function of the paragraph that this quote is pulled from. I found this to be a fairly digestible passage so I'm comfortable moving straight into step 3.

3. Always find 4 wrong answers! 
 
(A) counter a position that the author of the passage believes is incorrect -  If you hate these mildly abstract answer choices and find that they make you have to really slow down and match the words like counter a position to the authors words - you are not alone, I am here with you. Can you name that Michael Jackson song? Anyway, I digress. I hate these "the author is a proponent of the answer which is being opposed by ...etc" While this one is fairly straight forward, it takes a few tries to get comfortable with these types of choices and not cringe/dread seeing them.

Luckily, this one is fairly straight forward. The sentence immediately before says 'lets give free shares' and this quote says 'that's a bad idea'.  Bingo!  Keep this one on hold though and continue because you've found exactly zero wrong answers so far. 
 
(B) state a solution to a problem described in the previous sentence -  I'd call this answer choice a bit of nice low hanging fruit. You can read the sentence that the answer choice references and see that it's just not the case - the previous case says giving away free shares in a company would speed up privatization and the quote that you need to have some skin in the game is not a solution. In fact, the problem that the previous sentence highlights isn't even really about shares, it's about the idea that privatization seems to be occurring slowly. Thank you, next.

(C) show how opponents of the viewpoint of the author of the passage have supported their arguments -  Turning the answer choice wording into simple English, it says that the quote serves as support for people who do not prefer privatization. The phrase "what we obtain too cheap we esteem too lightly" does not show how people who don't favor privatization support their point of view. It just says that people need to earn the shares for privatization to benefit. It actually supports, rather than opposes.

(D) point out a paradox contained in a controversial viewpoint -  There is no verbiage indicating that the viewpoint is controversial, and it's not paradoxical that the most successful byproducts of privatization come when the individual interested are aligned to a company's.

(E) present a historical maxim to challenge the principle introduced in the third paragraph -  First off, if you don't know what a maxim is, and can't try to fish it out of context, this can be a bit tricky. An example of a maxim is a phrase like "actions speak louder than words", or "there's no such thing as a free lunch".

The third paragraph speaks to how improved productivity has in part come about because the employees of privatized industries were given the opportunity to buy shares in their own companies. The phrase ' “what we obtain too cheap we esteem too lightly' is actually supported by paragraph 3, not challenged.

dcummins · Answer

Passage map:
 Overall the passage generally discusses the benefits of privatising state-owned entities.
p1: Outlines privatisation
p2: states benefits
p3: why the benefits have happened - employee ownership
p4: caveats ownership - don't give away shares

Q1  
All the benefits are stated in the first paragraph.
D is incorrect because it is nowhere stated or supported.

Q2  
A is clearly stated in P3. 
B is incorrect because we are told you DONT do this
C is not outlined or discussed. Don't be fooled to thinking this is HOW privatisation occurs -its not.
D False. In fact we are told something different.
E NO. This is not a general rule. Even so, where this is mentioned in p3-4 we aren't told of the effect.

Q3  
Labour Disrupts are discussed in P2 "British ports..."
A is incorrect - we cannot support this with the info. given
B is incorrect - we are told this is a negative, not a postive
C is incorrect - cannot be supported and we are told that at the time of the disruptions the entities in question were state-owned
D is incorrect - I selected this incorrectly actually - Although we are told that the disruptions occured in a state-owned entity, we aren't told info to support whether it is found "more often" in state-owned than in private. We are only told that the incidence is reduced. If it is a perpetual issue no matter the ownership, then this statement is false. Again, we don't know.
E is correct because we are told "privatisation has raised the level of performance" and then we are given examples to support this. One such example of raising the performance is the reduction of disruptions, so we could infer that less disruption = greater performance.

Q4  
A - no. We are told that "the EMPLOYEES OF privatised industries" were given the opportunity to buy" shares. We aren't told what proportion at each company were eligible
B - Yes, the examples clearly state this 89% in one, 90% in another, 92% in the last
C - No where supported.
D - No. absolutely cannot be supported
E - NO. where is this supported?

Q5  
The principle described in the passage basically states the ownership of shares only works well when people actually pay for it. This is because they assign some value to it.

C is correct because employee share ownership plans are clearly only available in privatised industries. Next, we are told that this benefit alone has led to "improved productivity", allowing us to conclude that since state-owned entities don't have this benefit naturally we'd expect them to have lower productivity and thus lower performance.
B is incorrect because we are told that employees "were given the opportunity" to buy shares, they weren't forced to do so. Forcing an entity would have the negative effect described.

Q6  
A is incorrect because we are only told of some of the 'dangers' of a particular strategy employed by ALREADY Privatised companies
B is incorrect because his definition (in last paragraph) is only relevant to share ownership, not privatisation as a whole. Buying a privatised company from the government OBVIOUSLY incurs costs, but we aren't told whether this purchase alone is why they perform better than the government. In fact it is generally known that privatised businesses do better because they are MOTIVATED by profit, government isn;t.
C is incorrect - absolutely not 
D is even worse - we are only told about Britain
E is correct because in the last para. We are told that "some economists have suggested that giving away free shares would provide A NEEDED ACCELERATION OF THE PRIVATISATION PROCESS" - thus, it can be inferred that privatisation isn't going as QUICK as it should

Q7  
Thomas Paine is quoted to refute/ argue against "giving away" shares. The author uses Paine to essentially state that giving away shares DEFEATS the purpose of ownership schemes.

B is incorrect because this isn't a solution. It's a third-party quote to lend support to the author.
C is incorrect. Paine is FOR the author, NOT AGAINST
D is incorrect. There is no paradox. This is just advice NOT to give away shares
E is incorrect. No. What?
A is correct because, as mentioned above, Paine is quoted to counter the notion that shares should be given away for free.

KittyDoodles · Answer

Hi  GMATNinja 
 KarishmaB

Please can you advise why the answer to Question 6 is Option E and not Option B?

Thanks

GMATNinja · Answer

Question 6 
 
Question 6 asks us what we can infer about the privatization process in the United Kingdom.

Here's (E):
 
Evidence to support this answer choice can be found in the first sentence of the last paragraph:

" Some economists  have suggested that giving away free shares would provide a  needed  acceleration of the privatization process."

From this sentence, we know that "some economists" think that acceleration of privatization is "needed." We can then infer that the privatization process is taking place more slowly than some economists suggest is necessary.

(E) is the correct answer to question 6.

Compare that to (B):
 
Thomas Paine is quoted in the last paragraph, saying "what we obtain too cheap we esteem too lightly.”

This applies directly to a small aspect of privatization -- the opportunity for employees to buy shares of their newly privatized companies. However, we really can't say that the privatization process  in general  has adhered to Paine's maxim. Were the state-owned industries sold to private companies at a fair price, or were they too cheap? We simply don't know.

In addition, it's a bit of a stretch to say that this small quotation is a "prescription for business ownership." We just don't have enough information to infer (B), so (B) is out.

I hope that helps!

siddhantvarma · Answer

Hi experts
I am having trouble understanding how answer choice (C) is correct for question 5.

5. Which of the following statements is most consistent with the principle described in lines 30-32  ?
The principle basically means that if you have a stake in something, you'll work towards it. Upon reading the answer choices, I couldn't find a single option that resonates with the principle. Moreover, I discarded (C) because it seemed the answer choice that least makes sense.

Am I misunderstanding the principle? Or am I unable to understand answer choice (C)? 
A detailed explanation of this question along with the process of elimination would be very helpful.

GMATNinja · Answer

Question 5 
 
Keep in mind that we aren't looking for an answer choice that restates or paraphrases the principle. We also aren't looking for something that is true BECAUSE of the principle.

Instead, we're looking for something  consistent  with the principle. In other words, does the statement go against the principle? If not, then that statement can be considered consistent with the principle.

Here's (C) again:

The principle says: if people have a personal stake in something, then they (1) think about it, (2) care about it, and (3) make it prosper. So let's consider a few situations and whether each would be consistent with the principle:

Workers have a personal stake in their job, but they do NOT care about their company. This is NOT consistent with the principle (part 2). 
 Workers have a personal stake in their job, and they work to make their company prosper. That's certainly consistent with the principle (part 3). 
 Workers do NOT have a personal stake in their job, and they do NOT work to make their company prosper. This also consistent with the principle. The principle says that having a personal stake means you work to make it prosper. NOT having a personal stake and NOT working to make it prosper does not go against that principle.

Choice (C) fits with the third bullet above. Personal stake is absent. So, according to the principle, we can't assume that the workers will work to make the state-owned industries prosper. That could certainly be a reason why state-owned industries perform poorly.

So (C) is in fact consistent with the principle.

I hope that helps!

Legallyblond · Answer

but when he said that labor disruptions which was common in the 1970s i thought it meant inevitable

Legallyblond · Answer

you can remove D on the basis that its generalisation of state owned when we are given the example of britsh ports only

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