Logical Reasoning

PT103 · S3 · Q24 Over the last 25 years, the average

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Over the last 25 years, the average price paid for a new car has steadily increased in relation to average individual income.

Conclusion

People who buy new cars today, on average, spend a larger % of their income on a new car than did people 25 years ago.

Evidence

Over the past 25 years, the price of a new car has steadily increased in relation to avg individual income.

Evaluate

GIVEN THAT the price of a new car has increased relative to avg individual income, HOW CAN WE SAY that people are not paying a bigger % of their income on a new car nowadays?

Hmm, this seems kinda hard to wriggle out of. I thought we were going to say, But is that kind of ruled out by the fact that the average price of a new car has increased faster than avg income?

Not necessarily. Say that over the past 25 years, the avg income has gone from $50k to $60k a year, while the avg price of a new car has one from $20k to $25k. Income went up 1/5, or 20%. New car prices went up 1/4, or 25%.

But we would really need to know the income increase of the new-car-buying population. We don't have to assume that everyone in the population buys new cars. Maybe only affluent people buy new cars, and their income has gone up 30% over the past 25 years.

It's possible that the new-car-buying part of the population is an atypical sample whose income has actually increased more than has the price of a new car. In that case, the new car buyers would NOT be spending a higher % of income. It could actually be the same or lower.

Goal

Look for an answer that gives us more info about who is buying these new cars, because maybe THEIR reality is different from the overall avg increase in income levels.

24.

Which one of the following, if true, most weakens the argument?

There has been a significant
No Impact
Had the statistic been phrased in terms of household income, rather than individual income, then it may have been relevant how many people live in a household, but in this argument it's irrelevant.
32% picked this
The number of used cars
Out of Scope
Out of Scope: quantity of cars sold This is all about average price of new car / average income. We never care about raw totals when we're only dealing with averages or likelihoods.
2% picked this
Allowing for inflation, average individual
Strengthens
If car prices are going up and income is going down a bunch, then the author's conclusion sounds even more likely to be correct. Car prices would be a bigger percentage of one's income.
19% picked this
During the last 25 years,
Out of Scope: population size
Just like (B), we don't care at all about actual total number of cars told. Everything here is expressed in relative, average terms.
8% picked this
Correct
Sales to individuals make up
Why this is right
This is a hard answer to like, but it's the only thing telling us something about who's buying new cars. If new cars aren't being sold as much to individuals as they used to, then who is buying them? I guess companies / collectives. How would that let us argue that individuals who buy new cars nowadays are spending the same % of their income as ever (or less)? Because this is about the average price paid for a new car, it's blending together what individuals pay for their new cars and what businesses pay for their new cars. Over the past 25 years, a growing % of new car sales are going to businesses. Maybe businesses have more money for their new-car-buying than individuals do, and they go after cars at a higher price point. If businesses are more apt to buy new luxury cars in the $40-50k range whereas individuals are more apt to buy economy cars in the $15-25k range, then as businesses become a bigger slice of the new-car-buying population, the average price paid for a new car will creep more and more towards that $40-50 price point. Thus, the businesses who are buying new fancy cars might be driving up the average price paid for a new car, even though individuals buying a new car are still just looking at that $16k Honda Civic hatchback. We could say, "Author, individuals aren't paying more for new cars than 25 years ago", and he would say, "Oh yeah? Well then how come the avg price paid for a new car has gone up faster than individual incomes have?" and we would say, "Because more and more businesses are buying new cars, and they buy more expensive new cars than individuals do, so they've driven the avg up."
Skill tested: Weaken · how this choice captures the argument's function is the move to repeat next time.
39% picked this

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