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# With a record number of new companies starting up in

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Director
Joined: 03 Aug 2012
Posts: 895
Concentration: General Management, General Management
GMAT 1: 630 Q47 V29
GMAT 2: 680 Q50 V32
GPA: 3.7
WE: Information Technology (Investment Banking)
Followers: 24

Kudos [?]: 768 [1] , given: 322

With a record number of new companies starting up in [#permalink]

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09 Jan 2013, 22:05
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Difficulty:

75% (hard)

Question Stats:

52% (02:49) correct 48% (01:54) wrong based on 194 sessions

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With a record number of new companies starting up in Derderia and with previously established companies adding many jobs, a record number of new jobs were created last year in the Derderian economy. This year, previously established companies will not be adding as many new jobs overall as such companies added last year. Therefore, unless a record number of companies start up this year, Derderia will not break its record for new jobs created.

Which of the following is an assumption on which the argument relies?

a) Each year, new companies starting up create more new jobs overall than do previously established companies.

b) Companies established last year will not add a greater number of jobs overall this year than they did last year.

c) This year, the new companies starting up will not provide substantially more jobs per company than did new companies last year.

d) This year, the overall number of jobs created by previously established companies will be less than the overall number of jobs lost at those companies.

e) The number of jobs created in the Derderian economy last year was substantially larger than the number of jobs lost last year.

Took this question from repository,I had doubts so want to discuss them.

My LOR(line of reasoning):

Last Year:
New Comp(10 jobs/comp)
Old Comp (+10 jobs) Total = 20
Source:GMAT Club repository

This Year:
NC(Last Year ,these will not be called prev established as these are in establishing mode,opened up last year oly): 10 jobs/comp (Considering B if NC of last year add up more jobs than last year then it is uncertain that the increase would be more or less. So B incorrect
Old Comp (+5 jobs) Total (15)
NC(This year) unknown

Considering C which is the OA lets say NC(This year) 3 jobs/comp then Total :18 and last year total:20

Then how C is justified ???
[Reveal] Spoiler: OA

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Re: With a record number of new companies starting [#permalink]

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09 Jan 2013, 22:26
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Last Year :
New Companies = 10
Jobs per new company = 10
Total Jobs from new companies = 10*10 = 100
Jobs from old companies = 100
Total Jobs = 200

This Year :
New Companies = 1
Jobs per new company = 1000
Total Jobs from new companies = 1000
Jobs from old companies = 1
Total Jobs = 1001

In this scenario, we can see that although significantly fewer companies were created, the record for number of jobs is broken. The argument assumes that such a situation is not possible and C correctly addresses this assumption.
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Director
Joined: 03 Aug 2012
Posts: 895
Concentration: General Management, General Management
GMAT 1: 630 Q47 V29
GMAT 2: 680 Q50 V32
GPA: 3.7
WE: Information Technology (Investment Banking)
Followers: 24

Kudos [?]: 768 [0], given: 322

Re: With a record number of new companies starting [#permalink]

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09 Jan 2013, 22:52
MacFauz wrote:
Last Year :
New Companies = 10
Jobs per new company = 10
Total Jobs from new companies = 10*10 = 100
Jobs from old companies = 100
Total Jobs = 200

This Year :
New Companies = 1
Jobs per new company = 1000
Total Jobs from new companies = 1000
Jobs from old companies = 1
Total Jobs = 1001

In this scenario, we can see that although significantly fewer companies were created, the record for number of jobs is broken. The argument assumes that such a situation is not possible and C correctly addresses this assumption.

Few Changes:
New Companies = 10
Jobs per new company = 10
Total Jobs from new companies = 10*10 = 100
Jobs from old companies = 100
Total Jobs = 200

This Year :
New Companies = 10
Jobs per new company = 11
Total Jobs from new companies = 110
Jobs from old companies = 1
Jobs from company opened up last year =88 (assume)
Total Jobs = 199 (Still less , despite 11>10)

Thoughts plz
_________________

Rgds,
TGC!
_____________________________________________________________________
I Assisted You => KUDOS Please
_____________________________________________________________________________

Moderator
Joined: 02 Jul 2012
Posts: 1223
Location: India
Concentration: Strategy
GMAT 1: 740 Q49 V42
GPA: 3.8
WE: Engineering (Energy and Utilities)
Followers: 124

Kudos [?]: 1489 [1] , given: 116

Re: With a record number of new companies starting [#permalink]

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09 Jan 2013, 23:00
1
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targetgmatchotu wrote:
MacFauz wrote:
Last Year :
New Companies = 10
Jobs per new company = 10
Total Jobs from new companies = 10*10 = 100
Jobs from old companies = 100
Total Jobs = 200

This Year :
New Companies = 1
Jobs per new company = 1000
Total Jobs from new companies = 1000
Jobs from old companies = 1
Total Jobs = 1001

In this scenario, we can see that although significantly fewer companies were created, the record for number of jobs is broken. The argument assumes that such a situation is not possible and C correctly addresses this assumption.

Few Changes:
New Companies = 10
Jobs per new company = 10
Total Jobs from new companies = 10*10 = 100
Jobs from old companies = 100
Total Jobs = 200

This Year :
New Companies = 10
Jobs per new company = 11
Total Jobs from new companies = 110
Jobs from old companies = 1
Jobs from company opened up last year =88 (assume)
Total Jobs = 199 (Still less , despite 11>10)

Thoughts plz

True.. Of course this is a situation which is in accordance with the argument. But the problem with the argument is that it fails to consider the situation in my previous post. The very fact that such a situation is possible is enough to invalidate the argument.
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Re: With a record number of new companies starting [#permalink]

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09 Jan 2013, 23:35
targetgmatchotu wrote:
With a record number of new companies starting up in Derderia and with previously established companies adding many jobs, a record number of new jobs were created last year in the Derderian economy. This year, previously established companies will not be adding as many new jobs overall as such companies added last year. Therefore, unless a record number of companies start up this year, Derderia will not break its record for new jobs created.

Which of the following is an assumption on which the argument relies?

a) Each year, new companies starting up create more new jobs overall than do previously established companies.

b) Companies established last year will not add a greater number of jobs overall this year than they did last year.

c) This year, the new companies starting up will not provide substantially more jobs per company than did new companies last year.

d) This year, the overall number of jobs created by previously established companies will be less than the overall number of jobs lost at those companies.

e) The number of jobs created in the Derderian economy last year was substantially larger than the number of jobs lost last year.

Took this question from repository,I had doubts so want to discuss them.

My LOR(line of reasoning):

Last Year:
New Comp(10 jobs/comp)
Old Comp (+10 jobs) Total = 20
Source:GMAT Club repository

This Year:
NC(Last Year ,these will not be called prev established as these are in establishing mode,opened up last year oly): 10 jobs/comp (Considering B if NC of last year add up more jobs than last year then it is uncertain that the increase would be more or less. So B incorrect
Old Comp (+5 jobs) Total (15)
NC(This year) unknown

Considering C which is the OA lets say NC(This year) 3 jobs/comp then Total :18 and last year total:20

Then how C is justified ???

Conclusion: Therefore, unless a record number of companies start up this year, Derderia will not break its record for new jobs created.
There are only 2 modes for getting jobs, out of which one area is going to under perform hence the other must make up for the lost.

c) This year, the new companies starting up will not provide substantially more jobs per company than did new companies last year.
The author assumes that if new companies are started they will create jobs. I mean to say that he assumes that there can be cases where new companies just start up with creating no jobs i.e. just on paper.To achieve the goal if the number of start up company is high than they must add more jobs to the economy..Than only the goal of achieving an economy at par to the last year can be materialised.
VP
Status: Final Lap Up!!!
Affiliations: NYK Line
Joined: 21 Sep 2012
Posts: 1083
Location: India
GMAT 1: 410 Q35 V11
GMAT 2: 530 Q44 V20
GMAT 3: 630 Q45 V31
GPA: 3.84
WE: Engineering (Transportation)
Followers: 38

Kudos [?]: 565 [1] , given: 70

Re: With a record number of new companies starting [#permalink]

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10 Jan 2013, 01:22
1
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http://www.manhattangmat.com/blog/index ... -problems/
http://www.manhattangmat.com/forums/cri ... t2279.html

The question is discussed in detail on the above link...
Really it will help

Excellent question

Kudos If my post helped!!!!!!!!
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Kudos [?]: 225 [0], given: 0

Re: With a record number of new companies starting up in [#permalink]

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18 Jul 2015, 09:53
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: With a record number of new companies starting up in   [#permalink] 18 Jul 2015, 09:53
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# With a record number of new companies starting up in

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