gmatt1476 wrote:
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?
A. Suriland's wheat farmers have higher production costs than do farmers in many other wheat-producing countries.
B. Sale of a substantial proportion of Suriland's wheat crop on the world market would probably depress the price of wheat.
C. The transportation and brokerage costs that Suriland's farmers would face if they sold their wheat outside Suriland could amount to almost a dollar per bushel.
D. Suriland is surrounded by countries that do not import any wheat.
E. The price of a bushel of wheat on the world market occasionally drops below the average cost of producing a bushel of wheat in Suriland.
CR45650.01
Farmers are paid 1$ less for wheat by Govt than world market price.
Conclusion: If they sold wheat outside, they will get 1$ more per bushel (minus any transportation and brokerage).
It is a conditional conclusion. We need to say what will happen if these farmers sold outside. We need to find a reason that says that if these farmers sell outside, they may NOT get (1$ - transportation etc) extra.
A. Suriland's wheat farmers have higher production costs than do farmers in many other wheat-producing countries.
Irrelevant. We are only discussing two diff sale prices.
B. Sale of a substantial proportion of Suriland's wheat crop on the world market would probably depress the price of wheat.
Correct. If these farmers sold outside, price of wheat will go down. Then they may not get 1$ extra.
C. The transportation and brokerage costs that Suriland's farmers would face if they sold their wheat outside Suriland could amount to almost a dollar per bushel.
Doesn't matter. How much actual extra money they will make is irrelevant. The conclusion only says that they will make (1$ - transportation etc) extra. Whether it amounts to $0.9 or $0.0001, it is irrelevant.
D. Suriland is surrounded by countries that do not import any wheat.
Again irrelevant. Where they will sell in the world market doesn't matter. Perhaps the transportation cost will be 0.01$ per bushel, we don't know. Even if the transportation cost is very high, realise that it is irrelevant. The conclusion only says that they will get ($1 - transportation) extra. Even if this becomes negative, the conclusion still holds. The transportation cost is a variable and could take any value without changing the conclusion. The problem is with $1. If that changes, then the conclusion will not hold. Option (B) clearly says that the extra margin of $1 may not be available if these farmers tried to sell outside. So it weakens our conclusion.
E. The price of a bushel of wheat on the world market occasionally drops below the average cost of producing a bushel of wheat in Suriland.
Again, cost of production is irrelevant. We are taking about what the govt pays them for wheat and what they can get outside in the world market. The argument clearly says that the Govt pays them a dollar less than what they would get outside. Those are the two prices we need to compare.
Answer (B)
But question says the famers would get $1 less than the world market price, meaning if they sold outside and price reduces then the government will pay $1 less than the new world market price. Why have we assumed that the government is paying $1 less only at current rate? Where I am coming from it appears the $1 difference will remain, irrespective of world market price.