PrepTest 152, Section 2, Question 7
Economist: ChesChem, a chemical manufacturer located in Chester,(65 more words not shown)
The economist's argument requires assuming(1 more words not shown)
- AChesChem spends far(9 more words not shown)
- Bthe price of(7 more words not shown)
- CChesChem would not(7 more words not shown)
- Dthe only benefit(14 more words not shown)
- EChesChem will not(15 more words not shown)
Reading the argument
What if the gas price rises in Tilsen too?
At first, moving for cheaper gas raises other questions. Building a new factory or finding workers could cost more than the fuel savings. But the passage gives us the company's decision rule: it will move if Chester's price becomes more than twice Tilsen's. We can accept that rule and ask whether the conclusion actually meets it.
Suppose gas now costs $2 in Chester and $1 in Tilsen. That fits the stated two-to-one comparison. If the prices later become $3 and $2, Chester's price has risen, but it still isn't more than twice Tilsen's. The condition for the promised move hasn't been reached.
What we’re looking for
So an increase in Chester alone doesn't settle the comparison. For the required assumption, I'd look for the missing protection against an increase in Tilsen's price. Without it, the economist can't treat every increase in Chester as enough to trigger the move.
Working the answers
- A
Gas can be important to the company's decisions without being its largest expense. The passage already gives us the price comparison that triggers a move. Comparing gas spending with wages, materials, or other expenses doesn't tell us whether that price condition will be met.
- BCorrect
If Tilsen's price doesn't rise, any increase from Chester's current two-times price will put Chester above the threshold. But if Tilsen rises too, a Chester increase need not do that, as the $3-versus-$2 example shows.
This doesn't mean every possible increase in Tilsen prevents a move. Chester could rise much more. The problem is the conclusion's claim that any Chester increase is enough. That claim needs to rule out the competing increase that could keep the ratio below the required threshold.
- C
The company could remain profitable and still choose to move to improve its position. We don't need increased energy costs to destroy profitability. We need the relative-price condition that the stated moving rule uses.
- D
Lower gas costs needn't be the only benefit of moving. A shorter commute for workers or some other advantage could coexist with the stated rule. Those additional benefits don't fix or create the error about the two cities' relative prices.
- E
This says a Chester price increase is required for moving. The argument says an increase will be enough to bring about a move. Those are different claims. ChesChem might also move for another reason, or because Tilsen's price falls, without undermining the claim about what a Chester increase would do. The conclusion doesn't require that increase to be the only possible route.
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