Menu
Suriland cannot both export wheat and keep bread plentiful and affordable in Suriland. Accordingly, Suriland’s wheat farmers are required to sell their crop to the government, which pays them a dollar per bushel less than the price on the world market. Therefore, if the farmers could sell their wheat on the world market, they would make a dollar per bushel more, less any additional transportation and brokerage costs they would have to pay.
Which of the following, if true, most seriously weakens the argument?
Option A
Option B
Option C
Option D
Option E
(This question is from Official Guide. Therefore, because of copyrights, the complete question cannot be copied here. The question can be accessed at GMAT Club)
Suriland cannot both export wheat and keep bread plentiful and affordable in Suriland.
Suriland has to compromise on one of two fronts. If the country exports wheat, bread would no longer remain abundant and affordable locally. If it keeps enough bread for local consumption, the country would not be able to export wheat.
Accordingly, Suriland’s wheat farmers are required to sell their crop to the government, which pays them a dollar per bushel less than the price on the world market.
Farmers are required to sell wheat to the government – and that too at a price cheaper than the price on the world market. The word ‘accordingly’ indicates this requirement is due to the constraint mentioned in the first statement.
Therefore, if the farmers could sell their wheat on the world market, they would make a dollar per bushel more, less any additional transportation and brokerage costs they would have to pay.
If the farmers were not bound to sell to the government, they would make one dollar more per bushel (less the additional costs).
Gist: The government requires farmers to sell wheat to it at $1/ bushel less than the world market price (support). If the farmers could sell on the world market, they would make $1/ bushel more than they currently do, less the additional costs (conclusion).
The argument assumes that if the farmers could sell on the world market, they would. There are a few underlying assumptions here:
Taking some of the assumptions one step further:
The usual caveat: there could be other assumptions and other ways to attack the assumptions.
(A) Incorrect. The argument deals with whether the farmers would make the additional dollar (less costs) per bushel if they were allowed to sell on the world market. How these farmers’ production costs compare with farmers from other countries has no bearing on the argument.
(B) Correct. In the hypothetical scenario, if farmers sold a substantial proportion of wheat crop on the world market, wheat’s price would likely decrease. If wheat’s price did decrease, farmers would no longer make $1/ bushel more (less additional costs) than what they made when their government was paying them on exporting wheat. They’d earn according to the new, reduced price of wheat.
(C) Incorrect. The costs ‘could’ amount to ‘almost a dollar’ → the additional costs would still remain less than a dollar. So, the farmers would still make a higher revenue on selling the wheat on the world market. While, the closer the costs are to one dollar, the lower the incentive of farmers to go to the world market, as long as the farmers still make more money, they would have the added incentive to sell outside.
(D) Incorrect. What are the transportation costs associated with exporting to countries that do import wheat from Suriland? Do none of the countries around Suriland import wheat? Just ‘cause Suriland is surrounded by countries that do not import any wheat, doesn’t necessarily mean that all surrounding countries do not import any wheat. (I am surrounded by geniuses doesn’t imply everyone surrounding me is a genius.) Moreover, do none of the not-so-near countries import wheat? Doesn’t seem so, given the argument. Thus, while this piece of information might indicate that the additional transportation costs would not be miniscule, the option at best just mildly weakens the argument.
(E) Incorrect. How the price on the world market compares with the cost of production is irrelevant. The government pays $1 less than the world market price. So, if the farmers could sell on the world market, they still would – after all, they’d at least make a smaller loss selling on the world market than they would selling to their government.
This solution was created by Chiranjeev Singh and Anish Passi.
If you have any doubts regarding any part of this solution, please feel free to ask in the comments section.
Learn GMAT the right way – through common sense and logic. There’s no shortcut to a well-deserved success!
© 2021 All rights Reserved.
I marked answer choice C for this.
I understood from your explanation why C is wrong.
Regarding B- Isn’t the condition mentioned, about supply more than demand if the farmers start supplying wheat directly in the world market, true even if the wheat is supplied by the Suriland govt too. There is no information in the passage that says Govt paid prices are fixed and independent of market fluctuations.
C on the other hand looks a more close option saying incentives are not that high for farmers to directly sell in world market.
Pls help.
I agree with your analysis for option B. I have a question for you. The conclusion says “they would make a dollar per bushel more…” – here more than what?
Yes. I got it. SO even if the Govt prices also fall, selling in the world market would still be a dollar more than what is paid by the govt. Net diff would still be One $.
Thanks for the clarification CJ
Leave a comment