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jayhawk2001 · Sat May 26, 2007 3:30 pm

A small country, Country S, has instituted a hefty tax on imported electronics in an attempt to protect the largest company and employer in the country. As a result of this import tax, the national electronics company is now able to compete in the electronics market.

Which of the following can be inferred from the information above?

A. Only small quantities of electronics from companies outside of Country S will now be sold in Country S.

B. To take further advantage of the import tax, the national electronics company will expand its product line.

C. Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.

D. Electronics are cheaper to produce outside Country S than inside Country S.

E. The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.

Answers with explanations please.

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Cybermusings · Sun May 27, 2007 3:39 am

A small country, Country S, has instituted a hefty tax on imported electronics in an attempt to protect the largest company and employer in the country. As a result of this import tax, the national electronics company is now able to compete in the electronics market.

Which of the following can be inferred from the information above?

A. Only small quantities of electronics from companies outside of Country S will now be sold in Country S.

B. To take further advantage of the import tax, the national electronics company will expand its product line.

C. Electronics have become more expensive to import not only due to the added import taxes but also due to increased transportation costs.

D. Electronics are cheaper to produce outside Country S than inside Country S.

E. The national electronics company not only sells electronics products in Country S but also exports them to Country T and Country U.

B - clearly out since it stretches the statement a bit too far. We cannot infer B from the argument
C - Nothing in the argument mentions anything remotely connected to transportation costs. Hence eliminate
A - Again we cannot infer this from the argument
E - We do not know the geograhic regions in which the products are sold from the argument. Neither can we infer it.

I think the answer should be D. Since the argument mentions that the imposition of the hefty tax enabled the indigenous enterprises of Country S to "compete" within the domestic market, it implies the fact that foreign goods sans the "handicap" of taxes would be more price-attractive than domestic goods.

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Prasanna · Sun May 27, 2007 8:13 pm

I will also go with D

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jayhawk2001 · Sun May 27, 2007 8:36 pm

Yep. OA is indeed D.

Nice one Cybermusings and Prasanna. I was split between A and D but
I guess A takes the argument too far.

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ldoolitt · Fri Jun 01, 2007 9:34 am

This seems sort of funny to me and here is why. Say that imports from outside Country S are already more expensive than inside but that people still buy foreign products because their quality is far superior. But say country S taxes the foreign products so that no one inside Country S can afford them. They are then forced (if they need them) to buy products inside Country S. It doesn't say that the national electronics company is now competitive in the market outside Country S...or is that implied when they say they are able to "compete in the electronics market"?

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