Restaurant

This topic has expert replies
User avatar
Master | Next Rank: 500 Posts
Posts: 145
Joined: Sun Mar 15, 2015 7:27 am
Thanked: 2 times
Followed by:1 members

Restaurant

by src_saurav » Mon May 11, 2015 9:30 am
Studies in restaurants show that the tips left by customers who pay their bill in cash tend to be larger when the
bill is presented on a tray that bears a credit-card logo. Consumer psychologists hypothesize that simply seeing
a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their
spending power exceeds the cash they have immediately available.
Which of the following, if true, most strongly supports the psychologists' interpretation of the studies?
(A) The effect noted in the studies is not limited to patrons who have credit cards.
(B) Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented
with a restaurant bill on a tray with a credit-card logo than when the tray has no logo.
(C) In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards.
(D) In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by
credit card.
(E) The percentage of restaurant bills paid with a given brand of credit card increases when that credit card's
logo is displayed on the tray with which the bill is presented.


My answer was A as it would be valid if even those who did not posses credit card ended up paying more.

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 2095
Joined: Tue Dec 04, 2012 3:22 pm
Thanked: 1443 times
Followed by:247 members

by ceilidh.erickson » Mon May 11, 2015 11:43 am
To SUPPORT an argument, we first need to find the conclusion, the premises, and what's missing:

Conclusion: "seeing a credit-card logo makes many credit-card holders willing to spend more"

Premise: "tips left by customers who pay their bill in cash tend to be larger when the bill is presented on a tray that bears a credit-card logo"
"it reminds them that their spending power exceeds the cash they have immediately available"

Logical Gap: What if their spending power doesn't exceed their cash? I.e. what if they don't have a credit card? Then the conclusion wouldn't make sense.

So, to support the conclusion, we need evidence that is restricted only to those who DO have spending power that exceeds their cash on hand.

(A) The effect noted in the studies is not limited to patrons who have credit cards.

This is the opposite of what we're looking for. If the effect weren't limited to people with credit cards, then it doesn't make sense that the credit card logo would remind people of their purchasing power.


(B) Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented with a restaurant bill on a tray with a credit-card logo than when the tray has no logo.

Correct. This would suggest that seeing the logo is a reminder. For these people, it reminds them that they do NOT have purchasing power. That would help the contention that for other people, it serves as a reminder that they DO.


(C) In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards.

In this case, the credit card logo would not be a reminder of anything to these people.


(D) In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card.

We're not comparing cash tips to credit card tips. We're comparing cash tips with logos to cash tips with no logos.


(E) The percentage of restaurant bills paid with a given brand of credit card increases when that credit card's logo is displayed on the tray with which the bill is presented.

We're not talking about bills paid with credit cards. Irrelevant.
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education