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preserve the health of its local economy

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preserve the health of its local economy

by gmatjeet » Fri Jul 29, 2011 2:52 am
Editorial: In order to preserve the health of its local economy, Metropolis should not permit a Costmart warehouse department store to open within city limits. It has been demonstrated that when Costmart opens a warehouse department store within a city, the bankruptcy rate of local retailers increases in that city by twenty percent over the next several years.

Which of the following questions would be most useful for evaluating the conclusion of the editorial?
(A) Does the bankruptcy rate of local retailers in a city generally stabilize several years after a Costmart warehouse department store opens?
(8) Do most residents of Metropolis currently do almost all of their shopping at stores within the city limits of Metropolis
(C) Have other cities that have permitted Costmart warehouse department stores within city limits experienced any economic benefits as a result?
(D) Is the bankruptcy rate for local retailers in Metropolis higher than in the average city that has permitted a Costmart warehouse department store within city limits?
(E) Does Costmart plan to hire employees exclusively from within Metropolis for the proposed warehouse department store?

-> OA : C

Query: I am confused between B and C.
I chose B as it was helping in evaluating if the Costmart was the reason of bankruptcy!! Is it an incorrect method to approach this question?
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by sandy217 » Fri Jul 29, 2011 4:56 am
In order to preserve the health of its local economy

Above sentence is key here.Inspite of bankruptcies if economy is benefitted, Well!! purpose is served.
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by gmatjeet » Fri Jul 29, 2011 7:17 am
Thanks. But what should be the approach for such questions?
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by gmatjeet » Mon Aug 01, 2011 1:52 pm
Experts, Please help how to approach this question.
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by Ozlemg » Tue Aug 02, 2011 1:57 am
gmatjeet wrote:Editorial: In order to preserve the health of its local economy, Metropolis should not permit a Costmart warehouse department store to open within city limits. It has been demonstrated that when Costmart opens a warehouse department store within a city, the bankruptcy rate of local retailers increases in that city by twenty percent over the next several years.

Which of the following questions would be most useful for evaluating the conclusion of the editorial?
(A) Does the bankruptcy rate of local retailers in a city generally stabilize several years after a Costmart warehouse department store opens?
(8) Do most residents of Metropolis currently do almost all of their shopping at stores within the city limits of Metropolis
(C) Have other cities that have permitted Costmart warehouse department stores within city limits experienced any economic benefits as a result?
(D) Is the bankruptcy rate for local retailers in Metropolis higher than in the average city that has permitted a Costmart warehouse department store within city limits?
(E) Does Costmart plan to hire employees exclusively from within Metropolis for the proposed warehouse department store?

-> OA : C

Query: I am confused between B and C.
I chose B as it was helping in evaluating if the Costmart was the reason of bankruptcy!! Is it an incorrect method to approach this question?
because the case is with "the health of its local economy", E also sounds correct for me.
the more they employ, the less unemployment--> so economy benefits!
why not[spoiler] E?[/spoiler]
The more you suffer before the test, the less you will do so in the test! :)
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by rkanthilal » Tue Aug 02, 2011 11:21 am
P1: When Costmart opens a warehouse department store within a city, the bankruptcy rate of local retailers increases in that city by twenty percent over the next several years.
P2: Metropolis desires to preserve the health of its local economy.
C1: Metropolis should not permit a Costmart warehouse department store to open within city limits.

Question Stem: Which of the following questions would be most useful for evaluating the conclusion of the editorial?

Imagine if you were on the Metropolis City Council and you were presented with this argument. What else would you want to know about the impact of Costmart on the local economy before making a decision whether to approve or reject a new Costmart store?

The first premise is about increased bankruptcies. The second premise is about preserving the health of the local economy. Notice that bankruptcies are only one component of economic health. The argument makes a jump from this one piece of evidence on bankruptcies to suggesting that Costmart is bad for the local economy. To evaluate this conclusion we need to know if this jump is justified. We need to know the full effect of Costmart on the local economy.

(A) Does the bankruptcy rate of local retailers in a city generally stabilize several years after a Costmart warehouse department store opens? Incorrect. Knowing whether the bankruptcy rate stabilizes after several years does not help us evaluate the conclusion. This answer does not give us any additional information to indicate whether Costmart is good or bad for the economy.

(B) Do most residents of Metropolis currently do almost all of their shopping at stores within the city limits of Metropolis? Incorrect. The conclusion is based on evidence from the effect of Costmart on other communities. We don't know what percentage of residents in those communities do almost all of their shopping locally. Therefore, by using this answer choice, we cannot determine whether Metropolis will experience similar effects to their local business. This answer choice does not provide us with any useful information to evaluate the conclusion.

Furthermore, we are still left with the fact that bankruptcies are only one component of economic health. Even if we know that many businesses in Metropolis will go bankrupt if Costmart opens, that does not necessarily mean that Costmart is bad for the economy. We still don't know the full effect of Costmart on the local economy.

(C) Have other cities that have permitted Costmart warehouse department stores within city limits experienced any economic benefits as a result? Correct. This answer is correct because it addresses the gap in the argument between bankruptcies and economic health. The answer to this question will help us determine the effect of Costmart on a net basis. We know that bankruptcies typically result from a Costmart opening. We need to know if there are any positive effects of Costmart on the local economy. This answer gives us the information we need to determine the overall effect of Costmart on the local economy. This helps us evaluate the conclusion that Costmart should not be permitted to open in Metropolis.

(D) Is the bankruptcy rate for local retailers in Metropolis higher than in the average city that has permitted a Costmart warehouse department store within city limits? Incorrect. Knowing the current bankruptcy rate in Metropolis relative to other cities does not provide any useful information in evaluating the conclusion. Regardless of the current bankruptcy rate, the overall effect of Costmart on the local economy may be positive or negative. This answer does not help us determine the overall effect of Costmart on the local economy.

(E) Does Costmart plan to hire employees exclusively from within Metropolis for the proposed warehouse department store? Incorrect. Even if Costmart hires all their employees locally that does not necessarily mean a positive effect on employment. For example, let's say that through bankruptcies Costmart causes 1,000 people to lose their jobs. Costmart may only need 100 people to run the store. Even if Costmart hires all 100 locally, there is still a overall negative effect on employment. This answer choice does not provide any information on the overall effect on the local economy.
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