You have two minutes per question period (or 1.5 minutes, if it's Sentence Correction). If you're not done at that point, don't keep working on the problem. (Occasionally, you can spend another 15 or 30 seconds on a long problem that you know how to do EXACTLY but it's just a long problem so it takes a few more seconds. But never go beyond 3 minutes on any problem and, given that we can't gauge very well without a stopwatch, really think of it as never going beyond 2.5 minutes on any problem.)
Basically, you need to be on track by the halfway mark. If you're not, you need to switch modes to making an educated guess. An educated guess is simply figuring out what some wrong answers are, crossing them off, and then guessing randomly among any remaining answer choices - but you've raised your odds b/c you've gotten rid of some wrong answers. You can use estimation, logic, knowledge of how the test works, etc.
If you don't know exactly what you're doing by the halfway mark, then you aren't going to both figure out exactly what you're doing and do it with only half your time left. So you pull the plug right there, use the remaining time to make an educated guess, and keep going. That defines for you which 5-7 questions - the ones you can't do in 2 minutes, which equals those for which you don't know what you're doing after you've used half your time.
On a related note, if you've got 20 questions left and you've discovered you're behind on time, how do you get back on track? You're now going to have to make some random guesses, unfortunately - not a great position, but there is still one thing you can salvage: spread those guesses out. Don't let them cluster at the end.
So figure out how far behind you are - let's say you're 6 minutes behind. That's 3 questions. You have 20 questions left, so that means a guess approximately every 6-7 questions. The next time you see a question and you think "oh, boy..." make a random guess, very quickly, and keep going. Then don't make a random guess for at least 2-3 more questions. Then do it again the next time you see something and think "ugh - how do I do this?" Do this until you've made your 3 random guesses, spread out over your remaining questions.
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Stacey Koprince
GMAT Instructor
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Manhattan GMAT
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