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Buying Habits

by singhsa » Wed Sep 15, 2010 4:31 pm
The exchange rate between the currency of Country X and that of Country Y has historically favored the currency of Country Y. Because of this, citizens of Country Y often take their vacations in Country X, where the exchange rate makes hotels and restaurants more affordable. Yet, citizens of Country Y rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account.

Which of the following, if true, would best explain the buying habits of the citizens of Country Y?
A.Citizens of Country Y prefer the fashions available in their own country.
B.Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.
C.The citizens of Country X resent the buying power of the currency of Country Y.
D.The government of Country Y imposes tariffs on imported goods.
E.The currencies of Country X and Country Y are both weak compared to the currency of Country Z.

Cant understand why my answer is wrong
OA-D
IMO -B
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by ov25 » Wed Sep 15, 2010 4:51 pm
imo D

Even though fashions eventually make it to Y, the prices may still be more than those at X unless of coarse import duties may force Y to buy in their home town.
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by hitmis » Wed Sep 15, 2010 6:38 pm
imo D

b cannot be the right answer since the argument in the stimulus raises economic advantages of country Y citizens buying in Country X ("despite the fact that those items are more expensive"), hence you need to find an economic reason to explain the country Y citizen's behaviour.
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by debmalya_dutta » Wed Sep 15, 2010 7:38 pm
my pick is D.....
Not B because B fails to explain it .... If its just a timing thing, then the citizens of country Y would wait for the technology or fashion to get into country X and then they would purchase it ... That's a possibility ...

But if D is picked... irrespective of whether the goods are available at the same time or late in Country X as compared to Country Y, they will still be expensive because sales tax is imposed
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by singhsa » Thu Sep 16, 2010 3:55 am
debmalya_dutta wrote:my pick is D.....
Not B because B fails to explain it .... If its just a timing thing, then the citizens of country Y would wait for the technology or fashion to get into country X and then they would purchase it ... That's a possibility ...

But if D is picked... irrespective of whether the goods are available at the same time or late in Country X as compared to Country Y, they will still be expensive because sales tax is imposed
By why would anyone want to buy a product which is out of fashion?? Why would anyone have to wait for fashion or technology which has lost its glow. Would you go to some country to buy an old technology like VCR just because its cheaper there? It'll be of no use in your country
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by hitmis » Thu Sep 16, 2010 11:41 pm
singhsa,
In CR strengthen questions you need to attack the conclusion which is "Yet, citizens of Country Y rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account." in this argument.

B might be an additional reason (if true) for explaining this behaviour, but we are being asked to strengthen the argument given in the stimulus not find an explanation to a paradox.
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by arpita@gurome » Fri Sep 17, 2010 12:51 am
This is a "Resolve Paradox" question - the paradox is "citizens of Y come and vacation in X but do not take clothes and electronics items back home". Why is this so since vacations or clothes or electronics are cheaper in X compared to Y?.

Let's do a little bit of "directional pre-phrasing". Why would someone not want to take cheaper stuff back to Y from X? Well there could be logistics issues - people do not like to lug stuff around (vacations are consumed in X but electronics / clothes will have to be brought back), the prices are infact not cheaper when all the costs of bringing the stuff are accounted for, people in Y do not like the clothes or electronics from X, there could be many more but these come to my mind right away. I do not spend a lot of time thinking of these, but these come to me at first blush.....

Looking at the choices:
A - Strong choice, if Y's countrymen like their country's fashions they are not going to buy things from X. But this is focused on clothes, electronics items ......fashion hmm...not a strong connection unless we are talking about iPods, iPads .. but still we keep this choice as a contender.
B - Well if the stores receive clothes and technology late, chances are pretty low people from Y would want to buy them. Still it is possible we keep it as a contender.
C - Out of scope
D - Interesting the goods may not be as cheap as they seem when coming from X since an import tariff has to be paid. Let's keep this as a contender.
E - Out of scope

So we have A, B and D as contenders.
We see the argument is centered around price, that people vacation or would buy electronics / clothes in X because they are cheaper there. D cuts to the chase on that front, A does not address the point and further it just addresses fashion (most probably clothes) but leaves out electronics or at best covers it obliquely, thus is weaker than D. Finally, B does not address the central expense issue.

Thus D is the correct pick. Note we have to pick the best choice, it may not be ideal but will be best amongst the choices given.
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by g000fy » Fri Sep 17, 2010 10:25 am
Totally agree that it is a "resolve paradox" question. Wonderful explanation by Arpita. Thanks
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by singhsa » Fri Sep 17, 2010 4:26 pm
Thanks Arpita!!!

I guess i should not be overly critical when it comes to reasoning in GMAT.
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by rayapudisandeep » Fri Sep 17, 2010 11:57 pm
Hi, Can I know how this question has been identified as Resolve the Paradox.

Thanks,
Sandeep
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by g000fy » Sun Sep 19, 2010 1:07 pm
rayapudisandeep wrote:Hi, Can I know how this question has been identified as Resolve the Paradox.

Thanks,
Sandeep
Actually, you see a paradox here. You can say Y is USA and X is India. People from USA who visit India, find hotels really cheap because dollar equivalent of the money they spend is less. However, they don't buy clothings and electronics here. Why? We don't know. So there is a mystery here. Something is causing them to not buy products. And the cause is what we've to find out.

A resolve paradox question has two contradicting premises and no conclusion. You've to find the reason for the contradiction.
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