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Missing something in GMAC's CR....

This topic has 3 expert replies and 7 member replies
iMyself Senior | Next Rank: 100 Posts
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Missing something in GMAC's CR....

Post Tue Oct 13, 2015 9:33 am
Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching. This practice continues even though greater profits can be made from rubber tapping, which does not destroy the forest, than from cattle ranching, which does destroy the forest.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.

The official answer is "E"


I can not accept the option "E" as a correct option because of my explanation, which is given below.

There has been given a discussion about a corporation. The corporation carries LIMITED fund.
What is limited fund? IS IT SPECIF? -Nope. It may be $ 50,000, $100,000, $200,000 or, $10,000,000. It actually depends on the company size or some other factors, isn’t it?

Suppose, Limited fund=$200,000
Let (according to correct answer option “E”),
(Dollar) needs to begin Cattle ranching=$100,000
(Dollar) needs to begin rubber-tapping=$200,000 (since rubber-tapping is twice as high as cattle ranching)

From the argument we’ve:

Cattle Ranching:
1. Lower profits
2. Destroy forest

Rubber Tapping:
1. Higher Profits
2. Do not destroy forest
Question Stem says: But, they still cattle ranch though rubber-tapping is BETTER….WHY?
Here is my question/reasoning on something:

GMAC says (since ‘E’ is correct choice):
Since (Dollar) required to begin a rubber-tapping operation is twice as high as the(Dollar) required to begin a cattle ranching, they DO cattle ranch AS THEY DO NOT HAVE ENOUGH MONEY.
So what? I can still DO rubber-tapping because the argument and answer option didn’t specifically say that IF THE AMOUNT IS $100,000, THEN IT IS LIMITED FUND, BUT IF IT IS MORE THAN or LESS THAN $100,000, THEN IT WON’T BE THE LIMITED FUND! So, I can choose $200,000 as LIMITED fund.
How can I be sure that the cattle ranching groups pursue LESS profit? They still earn MORE profit, because the limited fund doesn’t mean that it is JUST $50,000, it may be $200,000, too.--right? If I can earn MORE profit by limited fund ($200,000), which is needed to open a rubber-tapping operation, how/why I make LESS profit? I am still earning MORE profit by this LIMITED fund!
GMAC didn’t specifically say that Dollar needs to begin Cattle ranching=$100,000 and $$ needs to begin rubber-tapping=$200,000 (since rubber-tapping is twice as high as cattle ranching) or any SPECIFIC AMOUNT, which indicates that the fund is limited). If the argument DIRECTLY says that LIMITED fund IS $100,000, this CR will still not be okay because we are not informed the cost of cattle ranching or rubber-tapping!

[i]The nitty-gritty:
I want to say that I’ve to know the cost of cattle ranching, rubber-tapping, and the limited fund amount simultaneously. The reasoning of the argument along with correct answer option is fallacious, and thus it does not make any sense! I am not saying that GMAC is wrong; I just want to inform that something is missing in this CR.

Analogy:
This question is totally related with decision-making.
Suppose:
I have an apartment, which consists of two rooms (Room# 1 and Room# 2). Here, this is not my job to invest in the room, which is BETTER; my job is to invest in that room, which is BETTER FOR ME as I am a decision-maker right on the moment.

Both rooms have special features. They are:

Room# 2 (equivalent to rubber-tapping):
1. It costs double than Room# 1, if I want to make it for the tenant to stay.
2. RISK factor: Tenants do not destroy anything in my room (tenants do not destroy anything because they are very good guys Smile!)
3. It makes higher profit,

Room# 1(equivalent to cattle ranching):
1. It costs half of the Room# 2, if I want to make it for tenant to stay.
2. RISK factor: Sometimes, tenants destroy my television, freeze, AC and some other like this (this tenants are wicked guys Sad!)
3. It makes lower profit.

Everyone wants to get high profit by investing on something; I am not regarding of that. The question is trying to give signal that I should choose one in which I can invest whole the money, which is in my pocket, in my bank account, and/or somewhere else (the total amount from these source is limited). To invest in something, at first I have to know the cost/price of that product and the volume of my fund-Is the fund enough or not? Here, I have a LIMITED fund. The fund may be worth $100,000 or $200,000, $600,000. I can’t invest in those ROOMS because I still do not know how much those rooms cost. Let, Room#2 costs $200,000 and Room#1 cost $100,000. Now, I’ll choose one, which is BETTER FOR ME not just better. I have a LIMITED fund. I do not know how much money in this fund. If the fund carries $200,000, then I must invest in Room# 2 to gain MORE profit. If the fund carries $100,000 then I must invest in Room#1 (here, I have to sacrifice higher profit as I do not have more money to invest in Room#2).---isn’t it?
But, I still do not know the volume of the fund and cost of Room# 1 & Room# 2. So, should I take decision to invest in Room# 1 or in Room# 2?----definitely not. So, how does GMAC take decision to invest in Cattle ranching without having enough information?!?

If my understanding is wrong, please correct me.
Thanks.

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Post Sun Aug 07, 2016 2:51 am
vinni.k wrote:
OA is indeed E

But what could be the reason for eliminating (A)

(A)The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

It does answer why Suncorp has been pursuing less profitable activity out of two.

I am only trying to understand the what is best reason to eliminate A

Vinni
According to the passage, rubber-tapping is more profitable than cattle ranching.
The passage does not suggest any reason NOT to pursue rubber-tapping.
To justify Suncorp's decision not to pursue rubber-tapping, the correct answer must show a DOWNSIDE to rubber-tapping.
Option A does not fulfill this requirement.
Eliminate A.

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vinni.k Master | Next Rank: 500 Posts
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Post Mon Aug 08, 2016 7:31 am
GMATGuruNY wrote:
According to the passage, rubber-tapping is more profitable than cattle ranching.
The passage does not suggest any reason NOT to pursue rubber-tapping.
To justify Suncorp's decision not to pursue rubber-tapping, the correct answer must show a DOWNSIDE to rubber-tapping.
Option A does not fulfill this requirement.
Eliminate A.
Thanks GMAT guru,

So, you are saying that (A) is not touching other part of the comparison as it is talking about the reason for cattle ranching but not about rubber tapping. Thus, this makes (A) not the best option for the answer.

Can I take it as a learning or pattern and apply to other close choices for such kind of questions ?
and i am not trying to learn and apply it mechanically, obviously at the time of elimination reasoning will be there.

Looking forward to your reply.
Vinni

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Marty Murray Legendary Member
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Post Tue Oct 13, 2015 7:58 pm
I tend to agree with what you are saying.

The question asks which helps to explain, but really we don't know that E explains anything. E may explain something, and on the other hand what E says may have nothing to do with what underlies a particular corporation's decision to invest in ranching rather than rubber tapping.

The question would be better worded as "Which of the following, if true, may help to explain...?" as only one of the answer choices at all makes sense as an explanation of the decision.

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GMAT/MBA Expert

Post Wed Oct 14, 2015 3:09 am
You are WAY overthinking this.

iMyself wrote:
Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching. This practice continues even though greater profits can be made from rubber tapping, which does not destroy the forest, than from cattle ranching, which does destroy the forest.

Which of the following, if true, most helps to explain why Suncorp has been pursuing the less profitable of the two economic activities mentioned above?

(A) The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

(B) Cattle-ranching operations that are located in tropical climates are more profitable than cattle-ranching operations that are located in cold-weather climates.

(C) In certain districts, profits made from cattle ranching are more heavily taxed than profits made from any other industry.

(D) Some of the cattle that are raised on land cleared in the Amazon are killed by wildcats.

(E) The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
FACT 1: Greater profits can be made from rubber-tapping.
FACT 2: Suncorp, a new corporation with limited funds, has been clearing large sections of the tropical Amazon forest for cattle ranching.

The correct answer choice must explain why Suncorp is investing in cattle-ranching rather than rubber-tapping, even though rubber-tapping is more profitable.
E: The amount of money required to begin a rubber-tapping operation is twice as high as the amount needed to begin a cattle ranch.
This option explains why Suncorp -- a corporation with LIMITED FUNDS -- is more interested in cattle-ranching: a cattle ranch requires a much smaller initial investment.

The correct answer is E.

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GMATGuruNY@gmail.com
If you find one of my posts helpful, please take a moment to click on the "UPVOTE" icon.
Available for tutoring in NYC and long-distance.
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iMyself Senior | Next Rank: 100 Posts
Joined
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Post Thu Oct 15, 2015 4:03 am
Hi GMATGuruNY,
Thanks for your reply. But, I CAN NOT accept your answer because you still DO NOT know how much money do you have in your pocket right away (though you've a LIMITED fund!, so what?). If you CAN invest in RUBBER-TAPPING by your LIMITED fund, WHY do you INVEST in CATTLE-RANCHING?!?. I am waiting for your answer....
Thanks...

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Post Fri Oct 16, 2015 5:25 am
iMyself wrote:
Hi GMATGuruNY,
Thanks for your reply. But, I CAN NOT accept your answer because you still DO NOT know how much money do you have in your pocket right away (though you've a LIMITED fund!, so what?). If you CAN invest in RUBBER-TAPPING by your LIMITED fund, WHY do you INVEST in CATTLE-RANCHING?!?. I am waiting for your answer....
Thanks...
The OA implies the following line of reasoning:
Suncorp has chosen to invest in cattle-ranching rather than rubber-tapping because the amount of money required to begin a cattle ranch is half that required to begin a rubber-tapping operation.
This line of reasoning is perfectly logical, given the company's limited funds.
We do not need to know how much capital Suncorp has on hand to understand this line of reasoning.

A word of advice:
It is pointless to argue against an OA from GMAC.
Instead, strive to understand the reasoning behind the OA so that you will be able to answer similar CRs correctly.

_________________
Mitch Hunt
GMAT Private Tutor
GMATGuruNY@gmail.com
If you find one of my posts helpful, please take a moment to click on the "UPVOTE" icon.
Available for tutoring in NYC and long-distance.
For more information, please email me at GMATGuruNY@gmail.com.

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iMyself Senior | Next Rank: 100 Posts
Joined
13 Oct 2015
Posted:
53 messages
Post Fri Oct 16, 2015 11:12 am
GMATGuruNY wrote:
iMyself wrote:
Hi GMATGuruNY,
Thanks for your reply. But, I CAN NOT accept your answer because you still DO NOT know how much money do you have in your pocket right away (though you've a LIMITED fund!, so what?). If you CAN invest in RUBBER-TAPPING by your LIMITED fund, WHY do you INVEST in CATTLE-RANCHING?!?. I am waiting for your answer....
Thanks...
The OA implies the following line of reasoning:
Suncorp has chosen to invest in cattle-ranching rather than rubber-tapping because the amount of money required to begin a cattle ranch is half that required to begin a rubber-tapping operation.
This line of reasoning is perfectly logical, given the company's limited funds.
We do not need to know how much capital Suncorp has on hand to understand this line of reasoning.

A word of advice:
It is pointless to argue against an OA from GMAC.
Instead, strive to understand the reasoning behind the OA so that you will be able to answer similar CRs correctly.
If you are an investor which one will you choose? Will you choose cattle-ranching? or rubber-tapping? Thanks...

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vinni.k Master | Next Rank: 500 Posts
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Post Sun Aug 07, 2016 2:15 am
OA is indeed E

But what could be the reason for eliminating (A)

(A)The soil of the Amazon forest is very rich in nutrients that are important in the development of grazing lands.

It does answer why Suncorp has been pursuing less profitable activity out of two.

I am only trying to understand the what is best reason to eliminate A

Vinni

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Marty Murray Legendary Member
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Post Tue Aug 09, 2016 11:57 am
vinni.k wrote:
GMATGuruNY wrote:
According to the passage, rubber-tapping is more profitable than cattle ranching.
The passage does not suggest any reason NOT to pursue rubber-tapping.
To justify Suncorp's decision not to pursue rubber-tapping, the correct answer must show a DOWNSIDE to rubber-tapping.
Option A does not fulfill this requirement.
Eliminate A.
Thanks GMAT guru,

So, you are saying that (A) is not touching other part of the comparison as it is talking about the reason for cattle ranching but not about rubber tapping. Thus, this makes (A) not the best option for the answer.

Can I take it as a learning or pattern and apply to other close choices for such kind of questions ?
and i am not trying to learn and apply it mechanically, obviously at the time of elimination reasoning will be there.

Looking forward to your reply.
Vinni
Hi Vinni.

You say that you are not seeking to do things mechanically, but what you are seeking to accomplish here sounds pretty mechanical.

The truth is that you are best off reasoning through GMAT CR questions rather than seeking to remember patterns.

In this case, Suncorp is not pursuing rubber tapping even though it has clear advantages over cattle ranching. So logic on its own dictates that the correct answer will show why, even given those advantages, Suncorp is not pursuing rubber tapping.

There is no good reason to seek to insert a pattern between the logic of the question and answer choices and your thinking. You just have to see the logic clearly and choose the best answer choice.

In this case, that rubber tapping is more profitable than cattle ranching has already been established. Adding the information provided by answer choice A does not change anything about that situation.

Here is an analogous situation.

Diamond mining in Country X is more profitable than gold mining.

Answer Choice: There is lots of gold in Country X.

The answer choice does not change what has already been established, that diamond mining is more profitable.

So A is not a "close" answer choice. A is more of a trap answer choice that seems close only if you don't fully understand the logic of and relationships between the prompt, question and answer choice.

So yes, there will be other questions that similarly require you to notice that answer choices don't fully address what is being discussed. At the same time, you are better off simply realizing that that type of thing can go on than you would be seeking to somehow patternize the way you handle GMAT CR questions.

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vinni.k Master | Next Rank: 500 Posts
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Post Tue Aug 09, 2016 12:55 pm
Thanks Marty,

Appreciate your reply.

Vinni

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