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With decreased production this year in many rice growing countries

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With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 05:06
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With decreased production this year in many rice-growing countries, prices of the grain on world markets have increased. Analysts blame this increase on the fact that only a small percentage of world production is sold commercially, with government growers controlling most of the rest, distributing it for local consumption. With so little rice being traded freely, even slight changes in production can significantly affect the amount of rice available on world markets.

Which one of the following, if true, would most call into question the analysts' explanation of the price increase?

(A) Rice-importing countries reduce purchases of rice when the price increases dramatically.
(B) In times of decreased rice production, governments store more of the rice they control and reduce their local distribution of rice.
(C) In times of decreased rice production, governments export some of the rice originally intended for local distribution to countries with free grain markets.
(D) Governments that distribute the rice crop for local consumption purchase the grain commercially in the event of production shortfalls.
(E) During reduced rice harvests, rice-importing countries import other kinds of crops, although this fails to compensate for decreased rice imports.


Source: LSAT

[Reveal] Spoiler:
Attachment:
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[Reveal] Spoiler: OA

Last edited by broall on 30 Aug 2017, 20:23, edited 4 times in total.
Reformatted question

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 05:22
I think A is a dramatic weakener.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 05:50
gmat1220 wrote:
I think A is a dramatic weakener.

Its not.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 06:40
Govt control can forestall the fluctuations in the price. Is it B?

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New post 22 Mar 2011, 06:50
gmat1220 wrote:
Govt control can forestall the fluctuations in the price. Is it B?

No.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 07:10
Demand and supply met. Causing the price to fall back. Is it D?

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 22 Mar 2011, 11:25
i think the answer is C
the reason explained in the text why the price of rice increased is because government growers stored all the grain to distribute to local consumption instead of selling in the world market.

C gives out another reason saying that its not because growers in the country stored it, its because government sold all the rice into another countries so the supply now decreased and this caused the price to increase.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 23 Mar 2011, 00:13
This is not realistic. I think the author of this question made a lot of bookish assumptions.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 23 Mar 2011, 00:26
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I Believe the answer is C:
The premise of the argument is that there is little amount of rice supply for commercial purpose-for instance if 90% of worldwide rice production is controlled by growers/governments for local consumption, then analysts argue that there is not enough supply of freely traded rice.
C: States that in times of decreased rice production, government growers sale some of the rice destined for local consumption/storage at the free market-This clearly weakens the argument's conclusion.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 23 Mar 2011, 19:26
The answer is C
The analysts blame the casue of price rise on the fact that the grains are stored for local use and little is given away for world market.

This argument can be weakened, if the grains stored for local use is given to the world market which is what option C talks about. Hence the answer!

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 25 Mar 2011, 23:39
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The author of the argument implies that because so little rice is traded freely in world markets, the price of rice increases dramatically in world markets in times of production shortfall.

Answ C says that governments will sell some of the rice they store for local consumption in times of production shortfall. However, selling some rice in world markets governments not necessarily cause the price of rice to fall. Imagine, what each government decides to sell only 1% of the rice they store for local consumption. It would be very little increase in demand to satisfy the demand when the production of rice falls and supply is not enough to cover the demand. Thus even though C is correct it does not weaken the author's explanation of why the world prices on rice increase.

Answ D clearly weakens the explanation of the author. Author believes that because governments keep locally produced rice out of world market that is why the price of rice rises in times of production shortfall. What if the governments buy the rice commercially from world market. That would attack the author's explanation by attacking one of the premises.

To understand:

Author believes that:

Production Shortfall---->Gov-t keeps rice out of world market to distribute locally -----> the supply of rice in the world market falls-----> price of rice rises

If D is correct:

Production Shortfall----> supply of rice in world market falls-----> government buys rice commercially from the market--->demand for rice rises-----> price of rice rises

So, D clearly weakens the explanation of the author.
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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 01:30
A can be a weakener if we assume that the governments anticipating a drop in demand for grain in the world markets withhold stocks of grain ,thus decreasing the grain supply to the world markets.
Can someone confirm ?
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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 02:14
mundasingh123 wrote:
A can be a weakener if we assume that the governments anticipating a drop in demand for grain in the world markets withhold stocks of grain ,thus decreasing the grain supply to the world markets.
Can someone confirm ?

IMO A is stating after effects of the price increase. We need to weaken the why the price increased,which this options fails to do.This option states that due to price increase rice-importing countries decrease their intake. So not a weakener.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 02:17
iMO C too .

BTW whats the OA ?

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 04:46
Argument - As governments control most of the Rice crop for local market,a deficit in production will lead to Short fall in World Market.

Requirement - Look for an option which shows that the world market will not be effected with such a short fall in production.

A Topic scribes the World Market,not just the countries which import.Hence nullified.
B It doesn't even discuss about the world market. Hence,nullified.

C Governments participate and supply Rice crop at times of short fall. Hence, the world market may not be effected by the current short fall.

Thus C is a clear winner.

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 04:52
vjsharma25 wrote:
mundasingh123 wrote:
A can be a weakener if we assume that the governments anticipating a drop in demand for grain in the world markets withhold stocks of grain ,thus decreasing the grain supply to the world markets.
Can someone confirm ?

IMO A is stating after effects of the price increase. We need to weaken the why the price increased,which this options fails to do.This option states that due to price increase rice-importing countries decrease their intake. So not a weakener.

Agreed that A is stating after effects of the price increase.
What if
1)the Govt Growers knew beforehand that A would hold true in case there is a price increase .
and then
2) The Govt decides to hold back stock in anticipation of reduced demand
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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 08 Apr 2011, 08:00
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Re: With decreased production this year in many rice growing countries [#permalink]

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Re: With decreased production this year in many rice growing countries [#permalink]

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New post 26 Aug 2017, 12:32
With decreased production this year in many rice-growing countries, prices of the grain on world markets have increased. Analysts blame this increase on the fact that only a small percentage of world production is sold commercially, with government growers controlling most of the rest, distributing it for local consumption. With so little rise beeing trade freely, even slight changes in production can significantly affect the amount of rice avaiable on world markets.

What we have:
Production of rice in this year in rise-countries decreased, prices increased.
What does analysis say:
1. Small percentage of world production is sold freely (commercially).
2. Governments of rise-coutries control most of the rest - distribute them locally.
3. So small amounts are sold freely, other are controled ---> so even slight decrease in production significantly affects amount of rice

Now, if we can find in options weakening of 1, 2, 3 (really 3 is a conclusion of 1 and 2, so we have to consider only 1 and 2).

A. Rice-importing countries reduce purchases of rice when the price increases dramatically.
It is logical action, but out of a scope. It does not affect 1-2-3.

B. In times of decreased rise production governments store more of the rise they control and reduce local consumption.
It is logical action, but as in A it does not affect 1-2-3.

C. In times of decreased rise production governments exports some of the rice originally intended for local distribution to countries with free grain markets.
That is good. It affects in some way 1-2-3. The governents reduce local amount and increase word amount for free markets.

D. Governments that distribute the rice crop for local consumption purchase the grain commercially in the events of shortfalls.
Not affects 1-2-3. And more. It is even may be a strengthening argument.
If everything is ok with crop, Government stores X for local and exports Y to world market.
If we have a short fall, Government stores X2 for local, exports Nothing to world market, and even buys Z addtionally ---> so it will be even smaller ammount of rise.
But evenif we overthink, the sentence in the1st row says all wee need


E. During reduced rise harvests, rice-importing countries import other kinds of crops, although it fails to compensate for decreased rice imports.
Irrelevant does not affect 1-2-3.

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Re: With decreased production this year in many rice growing countries   [#permalink] 26 Aug 2017, 12:32
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