LR Drill Set 7, Question 5
Economist: In order to shift from government-controlled to(69 more words not shown)
Which one of the following(8 more words not shown)
- AIn countries shifting(18 more words not shown)
- BCountries cannot successfully(20 more words not shown)
- CDuring times of(15 more words not shown)
- DCompanies that were(19 more words not shown)
- EThe longer a(10 more words not shown)
Reading the argument
Why do we need new companies to produce what consumers want? What stops the established companies from doing it?
The economist gives established companies an advantage: experience has made them efficient at producing familiar goods. New companies are preferable in other areas. That distinction matters before we get to the recommendation. “Old” isn't simply bad and “new” isn't simply good; each kind of company has a place.
My first thought about the call for mass production is capacity. Perhaps an old factory can make widgets efficiently but can't make enough of them. If it can produce only ten while consumers want a thousand, bringing in new producers might help. But the passage doesn't actually give us those limits. We shouldn't quietly make that explanation part of the evidence.
What we’re looking for
The question asks for a required assumption. We need to connect the consumer demand to the reason for recommending new companies. I'll keep the capacity question in mind, but the answer needs to fit what the economist says about the different strengths of established and new producers.
Working the answers
- ACorrect
Consumers want goods unlike those the country previously produced. Now the distinction in the premises matters: established companies have the advantage with familiar goods, while new companies are preferable in other areas. Demand for unfamiliar goods gives the recommendation for new companies an application.
This isn't saying demand has increased in total. The country could want the same number of goods but different kinds. Our initial thought about too few widgets concerned capacity; A instead connects what consumers want with the kind of production for which the economist favors new companies. Without that connection, the stated comparison could point toward established companies producing familiar goods.
- B
The first premise requires encouraging new private companies as part of the economic transition. B goes further by making their actual ability to produce sufficient quantities a requirement for a successful transition. The recommendation to encourage them doesn't depend on that stronger claim that the transition is impossible otherwise. A supplies the missing demand connection without adding this absolute condition.
- C
Political pressure to restore the old system could exist, but nothing in the recommendation relies on it. The economist is comparing producers and considering consumer demand, not explaining how to overcome opposition to reform. Whether that pressure exists leaves the stated reasoning unchanged.
- D
The history of ownership might affect resistance to privatization, but the argument doesn't use that issue to justify creating new companies. A formerly private company and one always owned by the state could resist equally strongly while the economist's production comparison remained intact. D answers a different practical question.
- E
Experience has improved established companies' efficiency at familiar production. That doesn't require a rule that every additional year always makes a company more efficient. An established company could reach a plateau and still have the advantage described. E expands the limited comparison into a continuous age-efficiency rule the recommendation doesn't need.
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