PrepTest 140, Section 1, Question 20
Adjusted for inflation, the income earned from wool(78 more words not shown)
Which one of the following(12 more words not shown)
- AAt the end(20 more words not shown)
- BThe prices of(16 more words not shown)
- CThe international and(22 more words not shown)
- DCompetition in wool(18 more words not shown)
- EAmong Australian sheep(19 more words not shown)
Reading the argument
Where did the extra money go?
The family's wool income increased even after inflation is taken into account. Selling more wool internationally explains that increase, because international buyers paid higher prices. Yet the family's prosperity didn't improve by a corresponding amount.
Perhaps there were more family members to support. Maybe a health crisis created new expenses, or getting the wool to international buyers cost much more. Each possibility would let the wool revenue rise without producing an equally large improvement in how well the family lived.
What we’re looking for
We're asked to explain both facts together. Keep the increase in wool income in place, then look for a reason the family didn't receive the full benefit we might expect.
Working the answers
- A
The end of the 1800s is later than the period we're explaining, 1840 to 1860. Also, the stated increase in wool income is already adjusted for inflation. This later comparison of general prices with domestic wool prices doesn't resolve the family's outcome during the relevant years.
- B
The family could still have sold some wool domestically; increasing the international share doesn't mean abandoning domestic sales. But we already know its overall income from wool rose substantially. A decline in one wool market doesn't explain why that increased wool income failed to bring a corresponding gain in prosperity.
- CCorrect
Wool isn't the whole farm. Prices for mutton, sheepskins, and other products these farmers produced fell sharply, so income from those products could offset the gains from wool. This explains the result through another part of the family's earnings, rather than through the higher expenses I initially imagined.
Think of a tax refund rising from $1,000 to $2,000 while annual earnings fall from $50,000 to $25,000. The larger refund doesn't make the person better off overall. Likewise, success in the wool part of the farm doesn't establish a matching improvement in the whole business.
- D
More competition might make selling wool difficult, but this family nevertheless earned more from wool. We would need something further—such as higher expenses—to explain why that increase didn't improve its prosperity proportionately. D doesn't provide that connection.
- E
This describes how other sheep farmers increasingly depended exclusively on international wool sales. It doesn't show that this family depended on those sales alone, nor explain its failure to gain proportionately from its higher wool income. C identifies another part of the family's business that could counteract the gain.
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