BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem

Assumption question

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Junior | Next Rank: 30 Posts
Posts: 11
Joined: Sat Jan 15, 2011 11:30 am
Followed by:1 members

Assumption question

by Ankittalwar » Wed Sep 14, 2011 7:33 am
Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.
Top
Source: — Critical Reasoning |
Senior | Next Rank: 100 Posts
Posts: 42
Joined: Fri Jan 07, 2011 9:58 am
Thanked: 2 times
GMAT Score:650

by Acorn » Wed Sep 14, 2011 8:07 am
IMO E.
Top
Junior | Next Rank: 30 Posts
Posts: 11
Joined: Sat Jan 15, 2011 11:30 am
Followed by:1 members

by Ankittalwar » Wed Sep 14, 2011 8:24 am
I also feel E should be the answer. However there is a lot of debate between B and E. Waiting for an expert reply on this one !!!
Top
User avatar
Legendary Member
Posts: 540
Joined: Sat Dec 20, 2008 7:24 pm
Thanked: 37 times
Followed by:6 members

by navami » Wed Sep 14, 2011 10:49 am
IMO C .
This time no looking back!!!
Navami
Top
User avatar
Legendary Member
Posts: 1101
Joined: Fri Jan 28, 2011 7:26 am
Thanked: 47 times
Followed by:13 members
GMAT Score:640

by HSPA » Wed Sep 14, 2011 6:17 pm
Yes it has to be C
If I negate E it kills the first line
First take: 640 (50M, 27V) - RC needs 300% improvement
Second take: coming soon..
Regards,
HSPA.
Top
Senior | Next Rank: 100 Posts
Posts: 85
Joined: Tue Sep 02, 2008 12:13 am
Thanked: 1 times
GMAT Score:650

by vzzai » Wed Sep 14, 2011 6:38 pm
IMO E. OA please.
Thank you,
Vj
Top
Master | Next Rank: 500 Posts
Posts: 416
Joined: Thu Jul 28, 2011 12:48 am
Thanked: 28 times
Followed by:6 members

by gunjan1208 » Wed Sep 14, 2011 7:48 pm
I shall go with E

Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?




A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies. wrong - Traditional companies - out of scope
B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees. - No mention of this in argument - Can't be said
C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company. - Again negated. Not mentioned in the passage
D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions. : But how do they become more profitable: Thats becasue the reason mentionedi in E. Isn't it. OUT
E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour: Yes.Gives the assumption. If this is the case, last line in the argument helds true.RIGHT CHOICE
Top
Master | Next Rank: 500 Posts
Posts: 139
Joined: Sat May 01, 2010 11:06 pm
Thanked: 4 times
GMAT Score:710

by badpoem » Wed Sep 14, 2011 7:51 pm
Ankittalwar wrote:Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

Conclusion - "Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers." --> The comparison here is between the internet companies that use open source software and hire volunteers and the traditional companies that do not do so.

A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies. --> Matches the gap explained above.

B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees. --> Again, administrative work is irrelevant here because it is not talked about in the premise. We should avoid bringing in a new element in an assumption question.

C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company. --> Who cares about the access levels? we aren't dealing with security here.

D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions. --> More or less in the future (after the companies become profitable) is not the talking point here.

E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour. --> revenue per hour s not in question here. At best we can talk about the total revenue.
Negate A --> Internet companies that use open-source software are NOT better suited to function efficiently with only a small core staff than traditional companies. --> The argument falls apart.

What's the OA?
Top
User avatar
Legendary Member
Posts: 540
Joined: Sat Dec 20, 2008 7:24 pm
Thanked: 37 times
Followed by:6 members

by navami » Thu Sep 15, 2011 4:23 am
Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?




A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.

OUT OF SCOPE
B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees. -



C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company. - This actually does not negate the conclusioon. A careful reexamination of the conclusion will give the below points.
1) Leave rest of the tasks to volunteer
2) Give some work to employees too...

Option C Strengthens point 2. and shows that althogh some work could be done by volunteers companies still need employees.

D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions. :

SAME AS E This can be conclusion not assumption.

E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour:

E Can not be the right choice becaz it reiterates the conclusion.
This time no looking back!!!
Navami
Top
User avatar
GMAT Instructor
Posts: 905
Joined: Sun Sep 12, 2010 1:38 am
Thanked: 378 times
Followed by:123 members
GMAT Score:760

by Geva@EconomistGMAT » Thu Sep 15, 2011 7:31 am
Ankittalwar wrote:Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

A. Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B. The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C. Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D. Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E. Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.
The answer should be B, but there are some nice trap answer choices here.

The argument presents a course of action (hire a small staff, leave the rest to volunteers) and claims that this model works - the volunteers do the work of hired employees, and profits increase as salary expenses are kept low. The conclusion is that internet companies should adopt the model.

B presents a prerequisite without which the model falls apart. If the amount of administrative work to be performed in an internet company is NOT small enough to be completed by a small task-force of full time employees, then the "hire fewer employees" model does not work - there is admin work that is required for the operation of the company, but does not get done.

A is a nice trap that compares internet companies to tradidional companies. Negating A does nothing towards weakening the conclusion that the model works - even if internet companies are not more suited to this model that traditional companies, we don't know whether that is good or bad, since the argument does not tell us anything about traditional companies.

C is completely irrelevant. It's not a necessary assumption - I don't NEED to assume that the full timers and volunteers have different access in order to reach the conclusion that the model works. This is true in real life, but for security,Intellectual property issues that have nothing to do with the argument as presented.

D A prediction for the future, not a necessary assumption.

E The keyword that makes this irrelevant is "increase". The argument tells us that the companies become more profitable because of reduced expenses, not because of increased revenues. In other words, from the argument we can understand that even if the revenue per working hour remains the same and does not increase, the business model still increases profits because a smaller percentage of the same revenue is given towards salaries (i.e. lower cost, not increased revenues).
Geva
Senior Instructor
Master GMAT
1-888-780-GMAT
https://www.mastergmat.com
Top
User avatar
Legendary Member
Posts: 1101
Joined: Fri Jan 28, 2011 7:26 am
Thanked: 47 times
Followed by:13 members
GMAT Score:640

by HSPA » Thu Sep 15, 2011 8:25 am
Nicely done Geva.. Some how totally missed it
First take: 640 (50M, 27V) - RC needs 300% improvement
Second take: coming soon..
Regards,
HSPA.
Top
Master | Next Rank: 500 Posts
Posts: 135
Joined: Tue Oct 13, 2009 10:27 am
Thanked: 3 times

by boazkhan » Thu Sep 15, 2011 7:34 pm
Hi Geva,
I also went with B as the answer, but my reason for eliminating E was the word Companies that rely on,,,,,The argument is about Internet companies and not just some random companies. Is my reasoning correct?


Thanks!
Top
User avatar
GMAT Instructor
Posts: 905
Joined: Sun Sep 12, 2010 1:38 am
Thanked: 378 times
Followed by:123 members
GMAT Score:760

by Geva@EconomistGMAT » Sun Sep 18, 2011 12:47 am
boazkhan wrote:Hi Geva,
I also went with B as the answer, but my reason for eliminating E was the word Companies that rely on,,,,,The argument is about Internet companies and not just some random companies. Is my reasoning correct?


Thanks!
No - E would still be wrong if it specified that "Internet Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour." - for the same reason I specified above, that the argument does not NEED to assume an increase in revenue per working hour, as it uses decreased costs, and not increased revenues, to increase profits.

Remember the formula "profits = revenues - costs" - some CR questions play on these 3 factors, and on the fact that profits can be increase or decreased by "playing" with any one of the other factors.
Geva
Senior Instructor
Master GMAT
1-888-780-GMAT
https://www.mastergmat.com
Top
Master | Next Rank: 500 Posts
Posts: 215
Joined: Sat Jun 14, 2008 4:24 pm
Thanked: 13 times
Followed by:1 members

by 1947 » Sun Sep 18, 2011 11:16 pm
good question and nice explanation from Geva....

Are there any such question in OG ? from where we can practice some more....

kind of tough question...with traps
If my post helped you- let me know by pushing the thanks button. Thanks
Top
User avatar
GMAT Instructor
Posts: 905
Joined: Sun Sep 12, 2010 1:38 am
Thanked: 378 times
Followed by:123 members
GMAT Score:760

by Geva@EconomistGMAT » Sun Sep 18, 2011 11:22 pm
1947 wrote:good question and nice explanation from Geva....

Are there any such question in OG ? from where we can practice some more....

kind of tough question...with traps
Many assumption questions follow this pattern of negation. Just hunt for "assumption" type question stems.

Also, read this.
Geva
Senior Instructor
Master GMAT
1-888-780-GMAT
https://www.mastergmat.com
Top
Post new topic Post Reply