Common Knowledge on GMAT Critical Reasoning

by on January 11th, 2013

Here is a very simple argument:

A – B = C. Over time, A has increased. Therefore, C has increased.

If the argument seems simplistic, that’s because it is—it’s not very test-like or very challenging. It gives evidence about changes in A and concludes about a change in C; the assumption (the missing piece necessary for the conclusion to be logical) is that B has not also increased. After all, if A went up but B went up as well, who knows what C will turn out to be!

But this simple example underlines a pattern that can turn into big points on Critical Reasoning questions. The GMAT testmakers expect students to understand certain common knowledge. And some of that common knowledge takes the form of simple three-part equations just like the one above. For instance:

Revenue – Cost = Profit

Price * Sales = Revenue

Imports – Exports = Trade Deficit

Spending – Revenue = Budget Deficit

Wage * Time Worked =  Total Salary

A very common Critical Reasoning argument is to state that, based on evidence of a change of only one of the terms on the left, the term on the right must also change. The assumption, as we just saw, is that a change to the other left-hand term won’t counteract the effects of the first. Keep your eyes peeled for this opportunity to quickly increase your accuracy and timing on the Verbal section. Try to spot the problem in this question of the week!

Question

Increasingly, American businesses requiring customer service phone lines have been utilizing overseas companies that can provide these services at extremely reduced rates.  Toll-free calls are routed to countries like India, where low-paid workers have been trained to deal with most of the typical problems consumers have with their credit cards, online services, and computer equipment. Since the companies using these overseas call centers are saving so much money, they will undoubtedly show higher profits than companies that do not.

Which of the following, if true, most seriously weakens the argument?

(A) There is strong competition among overseas call centers to provide the most comprehensive services at the lowest rates.
(B) Consumers opposed to exporting American jobs are willing to pay more for goods and services from companies that don’t engage in this practice.
(C) Certain banking services cannot be outsourced, since this would require the release of customer financial data.
(D) Because offshore telephone customer service companies provide only these services, they can train their employees more thoroughly than the American companies could.
(E) Some American companies send their own employees overseas to train the call center personnel in their particular businesses.

Solution

Step 1: Identify the Question Type

The direct wording in the question stem clearly indicates a weaken question.

Step 2: Untangle the Stimulus

The conclusion here is that companies employing overseas call centers will be more profitable than companies that do not. The evidence is that these companies save more with overseas call centers than do companies that don’t use them.

Step 3: Predict the Answer

The argument, however, assumes that all other elements of the businesses will remain the same. As we head to the choices, we should be looking for a fact that creates a problem for these businesses—in other words, something that would interfere with their moneymaking ability once they decide to outsource their customer service operations.

Step 4: Evaluate the Choices

If, as choice (B) suggests, companies that export jobs lose favor with consumers, who are willing to compensate the companies that don’t export jobs by paying higher prices for their goods and services, it is far less likely that the companies using the overseas call centers will see higher profits. (B) is our answer.

(A) would actually strengthen the argument: if offshore call centers are competing with each other to offer the lowest-price services, American companies that use them will save even more money, potentially increasing their profitability.

(C) specifies a certain type of business function that cannot be outsourced, which is irrelevant to the argument.

(D) is also a strengthener; if the offshore call center employees are better trained, they can provide better customer service, which could contribute to the profitability of the companies that use them. Expect one or two answer choices in a strengthen/weaken question to do the opposite of what you’re looking for.

And (E) discusses the personnel who train the call center employees, another topic that is irrelevant to the argument (particularly because the cost of training is not specified).

The correct answer is B.

Written by Kaplan GMAT Instructor Eli Meyer.

6 comments

  • I selected E because my mind automatically associated sending employees overseas to rising costs for the company.

    • I also thought E. I think here we are stuck between two weak choices and whichever weakens more. Since "Some" implies directly "not the majority", B wins. But i am sure in real GMAT, it will depend on luck and mood for these types of questions.. No sound logic.

  • Hi Eli..Correct me if I am wrong. I am not convinced with your thought process. If the consumers who are opposed to the exporting of American jobs are willing to pay higher prices of goods and services, then we are not given the fact of the proportion of consumers. What if only 5% of the US population only fall under this category and not the rest. There is no substantial logic to go with this option.. B. If the option that majority (90%) of the overall consumer population decide that way, then I am convinced to choose option B

  • I picked the choice B too.

  • I loved your article. Thanks !!

  • Hi AtulSwami, Sruti, neash,

    I quite get what neash is saying. However, though B might not be perfect, it is the best choice here. 

    A, C and D are irrelevant.

    If one has a closer look at E which states that - Some American companies send their own employees overseas to train the call center personnel in their particular businesses - I guess you all are assuming that this will be the extra cost to the company and hence will affect profits.
    However, the argument has already defied this by stating that - "Since the companies using these overseas call centers are saving so much money, they will undoubtedly show higher profits than companies that do not". Please Note - The companies are already saving money. The question here is how they compare to other companies. B addresses this. If consumers are willing to pay more to other companies that do not outsource, the ones that do will not show higher profits than the ones that do not.

    Hope this helps. Cheers!!

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