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Expert replies
by diebeatsthegmat » Tue Sep 20, 2011 6:56 pm
The consumer price index is a measure that detects monthly changes in the retail prices of goods and services, The payment of some government retirement benefits is based on the consumer price index so that those benefits reflect the change-in the cost of living as the index changes. However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index
(B) fails to make explicit which goods and services are included in the consumer price index
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods
(D) uncritically draws an inference from what has been true in the past to what will be true in the future
(E) makes an irrelevant shift from discussing retail prices to discussing production costs
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Source: — Critical Reasoning |

by badpoem » Tue Sep 20, 2011 8:00 pm
IMO (E).

Technological innovations can affect the cost of production but the retail prices may remain as high as they were.
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by saketk » Tue Sep 20, 2011 8:16 pm
diebeatsthegmat wrote:The consumer price index is a measure that detects monthly changes in the retail prices of goods and services, The payment of some government retirement benefits is based on the consumer price index so that those benefits reflect the change-in the cost of living as the index changes. However, the consumer price index does not consider technological innovations that may drastically reduce the cost of producing some goods. Therefore, the value of government benefits is sometimes greater than is warranted by the true change in costs.

The reasoning in the argument is most vulnerable to the criticism that the argument

(A) fails to consider the possibility that there are years in which there is no change in the consumer price index
(B) fails to make explicit which goods and services are included in the consumer price index
(C) presumes, without providing warrant, that retirement benefits are not generally used to purchase unusual goods
(D) uncritically draws an inference from what has been true in the past to what will be true in the future
(E) makes an irrelevant shift from discussing retail prices to discussing production costs
The argument says that "value of government benefits" is based on the changes in the Retail prices. But, while pointing the flaw in this process - the arguments brings in "cost of producing some goods" -- shift from Retail prices to production costs without considering other factors.

IMO E
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by sl750 » Wed Sep 21, 2011 10:09 am
Conclusion: Because CPI doesn't factor in technological innovations that may reduce the cost of producing some goods, the value of government benefits that otherwise would not be considered greater is greater than is justified by the true change in costs

The author assumes that the low production costs of those "some goods" benefitted by technological innovations has a bearing on government benefits, but we don't know whether the CPI includes those
goods in its measure to detect retail prices of goods. Because if it does not then we can conclude that the author is wrong in concluding that, "the value of government benefits is sometimes greater than is warranted by the true change in costs"

So my answer is B
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by GmatKiss » Wed Sep 21, 2011 10:22 am
Real technical one! Can you post the source please.
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by tpr-becky » Wed Sep 21, 2011 2:55 pm
You are looking for the flaw so identify the conclusion and premise first:

Conclusion: Gov't benefits are sometimes too large
Premises: Gov't benefits based on CPI which looks at consumer prices; CPI doesn't consider production costs.

E is the only answer that focuses on the word shift from consumer prices to production costs - consumers must pay consumer prices regardless of production costs therefore saying if production costs are lower then you shoudl get less money to purchase them is not logical. Thus E is the best answer.
Becky
Master GMAT Instructor
The Princeton Review
Irvine, CA
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by amit2k9 » Wed Sep 21, 2011 9:07 pm
the gap in the argument is how production cost is related to the retail price.
this has been rightly caught by the option E.
Hence E is the correct option indeed.
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