Automobile Industry

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Automobile Industry

by qwerty12321 » Fri Aug 01, 2014 11:31 pm
The automobile industry in Country A argues that, because foreign automakers underpay workers and get nationally subsidized materials, they can offer artificially low prices. Thus, the industry argues, the current 8 percent tariff on imported products should be increased for automobiles. However, other industries in Country A remain healthy despite competition with imported products without exceptional tariffs. This fact indicates an increased automobile tariff is unnecessary.

Which of the following, if true, most strongly supports the argument of Country A's automobile industry against the challenge made above?


(A) In some industries-such as childcare, scientific equipment, and higher education-consumers care far more about the quality of the product than the price.

(B) Many governments support automobile exports so strongly that they would be willing to increase subsidies to offset any additional costs that are a result of exports.

(C) There are several industries for which the ratio of workers' wages in Country A to the workers' wages in other countries is even higher than it is in the automobile industry.

(D) Because of a scarcity of mineral and metal resources, Country A's automobile industry has to import, and pay tariffs on, most mineral or metal materials used to produce automobiles.

(E) No industries in Country A other than the automobile industry, including those whose raw materials are highly taxed, have asked for an increase of the 8% tariff.

Can someone please explain me why D is correct?

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by [email protected] » Sat Aug 02, 2014 11:11 am
Hi qwerty12321,

This CR prompt is based on a comparison. To answer this question, you need to understand the basis of the comparison.

The Facts:
-In Country A, there is an 8% tariff on imported products
-Foreign automakers underpay workers and get NATIONALLY SUBSIDIZED MATERIALS, so the foreign automakers can lower the prices of their automobiles.
-The Auto Industry in Country A wants to INCREASE the tariff for automobiles.
-Other industries in Country A remain healthy despite the competition with imported products.

The Conclusion:
-Since other industries in Country A are healthy with the current situation (8% tariff on imported products), the Automobile Industry should not need an increased tariff on imported automobiles.

The Logic:
The comparison here is that the Auto Industry is supposedly just like every other industry, so changing the tariff shouldn't be necessary. We're asked to STRENGTHEN the Auto Industry's point, so we need an answer that explains how the Auto Industry's situation is NOT like the situations faced by the other industries in Country A. The correct answer will likely involve something having to do with either worker's pay or materials (since they were both specifically mentioned as affecting the cost of foreign automobiles).

Answer D strengthen's the Auto Industry's argument by pointing out an additional set of material-costs (that are also affected by the tariff) that affect the price of the automobiles. This point helps prove that the Auto Industry is NOT necessarily like other industries in Country A.

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by BTGmoderatorAT » Sun Sep 03, 2017 7:42 am
My choice is "D"

Purchasing supplies from other countries simply means additional expenses and taxes.