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Because of a rare type of fungus that killed off many cacao

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by BTGmoderatorDC » Tue Sep 18, 2018 5:12 pm
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Because of a rare type of fungus that killed off many cacao trees in Brazil, there was an unusually meager harvest of cacao beans this year. The wholesale price of cocoa solids and cocoa butter has increased significantly and is unlikely to fall in the foreseeable future. As a result, the retail price of chocolate is certain to increase within six months.

The answer to which of the following questions would provide information relevant to evaluating the argument above?

A Has the price of cocoa solids and cocoa butter remained steady during other periods of poor harvest?
B Are consumers willing to spend more for chocolate?
C Have the prices of other ingredients in chocolate decreased recently?
D What percentage of cacao trees in Brazil were affected by the fungus?
E Can the fungus be eliminated within the next six months?

OA C

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by deloitte247 » Thu Sep 20, 2018 8:13 am
Option A - INCORRECT.
There is a need for us to know the cause of poor harvest of cocoa solids and cocoa butter prior to this period where a rare fungus that killed off many cocoa tree in Brazil has been accounted for. Also, why the price remained steady increased during other periods of poor harvest.

Option B - INCORRECT.
The willingness of consumers to spend more for chocolate is not the priority in this argument, but, rather the quality and quantity of chocolate that can be produced after the poor harvest that is been experienced due to the rare fungus attack on cocoa tree.

Option C - CORRECT.
Definitely the poor availability of cocoa solids and cocoa butter in the making of chocolate is going to affect the production of chocolate and also increase the prices of chocolate at the retail market. But, if the other ingredients use in the production of chocolate decrease recently then, there could be some availability and reduction in the price at the retail store compare to when the hike of price is on both the cocoa and the ingredient needed in the production of chocolate.

Option D - INCORRECT.
There is also need to know the percentage of cacao trees in Brazil which were affected by the fungus, this will enable us know the effect of the fungus in the available of chocolate in the next 6 months.

Option E - INCORRECT.
This option is also reasonable to be looked into, because we need to know if the fungus can be eliminated within the next six months.
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by ceilidh.erickson » Fri Sep 21, 2018 12:56 pm
When we're asked to EVALUATE an argument, we must first determine how the argument is logically flawed.

Premises:
- Because of a rare type of fungus that killed off many cacao trees in Brazil, there was an unusually meager harvest of cacao beans this year.
- The wholesale price of cocoa solids and cocoa butter has increased significantly and is unlikely to fall in the foreseeable future.

Conclusion:
- As a result, the retail price of chocolate is certain to increase within six months.

Missing information:
- is the price of cocoa the only thing that affects the price of chocolate? What about sugar, milk, etc?
- is it possible for the chocolate companies to accept a smaller profit margin?
- is the timeline right? Is the price of chocolate in 6 months based on the price of cocoa now? Or might there be stockpiles of cocoa, so it won't affect the price for a few years?

We're looking for a question for which a YES answer would WEAKEN the argument, and a NO answer would STRENGTHEN (or vice versa):

(A) Has the price of cocoa solids and cocoa butter remained steady during other periods of poor harvest?
- if yes... our conclusion about 6 months from now could still hold, because we already know that the price went up.
- if no... that still doesn't matter to our current situation

(B) Are consumers willing to spend more for chocolate?
- if yes... this could support the idea that the price will go up
- if no... the price might still have to go up, if the price increase on cocoa eats into (pun intended) the entire profit margin. People might not buy as much, but the company may not have a choice.

(C) Have the prices of other ingredients in chocolate decreased recently?
- if yes... this weakens the argument. The price might be able to stay the same.
- if no... this strengthens the argument. It makes it more likely that the price will indeed go up.

(D) What percentage of cacao trees in Brazil were affected by the fungus?
This is irrelevant. We're already told that it's "many" trees - enough to significantly impact the price of cocoa. What that represents as a percent of the total won't impact the argument one way or the other.

(E) Can the fungus be eliminated within the next six months?
- if yes... this could impact cocoa prices further down the line, but we don't know if it impacts the price of chocolate in 6 months.
- if no... nothing changes about our argument.

The only question that helps us to evaluate the validity of the argument is C.
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education
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