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taxpaying

by Sprite_TM » Tue Apr 07, 2009 4:09 pm
i was torn between A and B but chose A because there was the word "Tax" in the answer but none in B

Sales taxes tend to be regressive, affecting poor people more severely than wealthy people. When all purchases of consumer goods are taxed at a fixed percentage of the purchase price, poor people pay a larger proportion of their income in sales taxes than wealthy people do.
It can be correctly inferred on the basis of the statements above that which of the following is true?
(A) Poor people constitute a larger proportion of the taxpaying population than wealthy people do.
(B) Poor people spend a larger proportion of their income on purchases of consumer goods than wealthy people do.
(C) Wealthy people pay, on average, a larger amount of sales taxes than poor people do.
(D) The total amount spent by all poor people on purchases of consumer goods exceeds the total amount spent by all wealthy people on consumer goods.
(E) The average purchase price of consumer goods bought by wealthy people is higher than that of consumer goods bought by poor people.

OA: B

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by gmat740 » Tue Apr 07, 2009 7:37 pm
why there is confusion
Answer is clearly B

conclusion:
poor people pay a larger proportion of their income in sales taxes than wealthy people do

Assumption:
When all purchases of consumer goods are taxed at a fixed percentage of the purchase price and rich as well as poor buy the same goods.

(B) Poor people spend a larger proportion of their income on purchases of consumer goods than wealthy people do
Since the tax is only there when you buy an item,so the more you buy the more is the tax you are paying
(A) Poor people constitute a larger proportion of the taxpaying population than wealthy people do
Even if poor people are in majority it does not mean they pay more sales tax because sales tax is levied only on the goods you purchase

rest of the choices are as bad as they could be

Hope this helps


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by lunarpower » Wed Apr 08, 2009 3:00 am
remember that, on "draw the conclusion" questions, you have to pick a choice that is RIGOROUSLY SUPPORTED by the information in the passage and that requires NO ADDITIONAL ASSUMPTIONS. none at all.

let's say the sales tax is s%. then if you spend c% of your income on consumer goods, then you spend s% of c% of your income on sales tax. notice, in particular, that this percentage does not change as a function of income; both rich and poor people pay s% of c% of their income in sales taxes.

the passage thus states that s% of c% for the poor is greater than s% of c% for the wealthy.
since s% is fixed (it's the statutory sales tax rate), this implies that c% for the poor is greater than c% for the wealthy, as stated in choice (b).

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(a) is wrong because nothing in this passage has anything to do with the relative numbers of poor and rich people.

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by the way, if you're going to play the "stick to things that are mentioned in the passage" game - a very, very good game to play on this question type - then (b) beats (a) anyway.

(a) mentions proportions of the population, a concept that's not mentioned in, or deducible from, the passage. therefore, (a) is outside the scope of the passage.

(b) contains only items that are actually in the passage: poor people, proportions of income, purchases of goods, wealthy people. (this doesn't guarantee that it's the correct answer, of course, but it's a good sign.)

THE CORRECT ANSWER DOES NOT HAVE TO CONTAIN EVERY CONCEPT THAT APPEARS IN THE PASSAGE!!
if you have any concepts that are not mentioned in the passage, then that's the death of whatever answer choice you're considering ... but few, if any, correct conclusions will contain all of the concepts from the passage.
remember that you have to pick a choice that makes NO ADDITIONAL ASSUMPTIONS. the more premises there are, the less likely that you'll be able to interconnect them all without making assumptions. therefore, it is highly unlikely that a correct conclusion will contain all the relevant concepts; therefore, the lack of "tax" is no reason at all to dislike this answer choice.
Ron has been teaching various standardized tests for 20 years.

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by vanessa.m » Sun May 15, 2016 2:07 am
B seems to be the best choice