PrepTest 124, Section 3, Question 1
At many electronics retail stores, the consumer has(36 more words not shown)
Which one of the following,(6 more words not shown)
- AProblems with electronic(22 more words not shown)
- BBecause problems are(15 more words not shown)
- CMost of those(24 more words not shown)
- DSome extended warranties(19 more words not shown)
- ERetail stores sell(19 more words not shown)
Reading the argument
What if the extended warranty costs a dollar?
Suppose a store offered to cover your computer for its entire life for $1. Even if most problems occur while the manufacturer's warranty still applies, protection against a later problem might be worth that tiny price. This is a hypothetical deal, but it exposes what the argument hasn't compared: the warranty's cost and its possible benefit.
Most problems happening early doesn't mean no problems happen later. We need to know how expensive those later problems would be before deciding that consumers are generally better off paying for repairs themselves.
What we’re looking for
We're strengthening the argument against buying the extended warranty. I'd like to learn that later problems are rare or minor enough that the extra protection isn't worth its cost. We need to close the cost-benefit gap in the author's recommendation.
Working the answers
- ACorrect
Later repairs generally cost little compared with the extended warranty. Imagine a $5 repair that a $100 warranty would have covered. Even if that later problem occurs, paying for the repair leaves you better off than buying the warranty. Those figures are an illustration; A supplies the relevant comparison without needing exact prices. It gives consumers a reason to skip the extra coverage.
- B
Cheap coverage makes the warranty easier to justify, not harder. This answer speaks to the cost we wanted to know about, but it moves against the recommendation. Even an infrequent problem might be worth insuring against if protection costs very little.
- C
If buyers have unusually good reasons to expect their products to break, the extra protection might be especially useful for them. That doesn't establish that consumers are generally better off avoiding it. It also doesn't tell us that expected repair costs are smaller than the warranty price.
- D
Some coverage overlaps the manufacturer's warranty, but the answer also says it extends into later years. We still don't know whether protection during those later years is worth the price. Merely describing the coverage period doesn't settle that comparison.
- E
A store's reason for selling a warranty doesn't tell us whether buying it benefits the customer. The store might like repeat business whether its warranties are good deals or bad ones. We need the consumer's costs and benefits, not the seller's marketing motive.
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