PT152 S2 Q7 ExplanationEconomist: ChesChem, a chemical manufacturer

Answer choices, explained

1. A

   Too Strong1% picked this

   ChesChem spends far more on natural gas than on any

   Too Strong: far more than Out of Scope: any other expense Comparing what CC spends on natural gas to what it spends on other stuff it totally outside the conversation. This conversation is only about whether CC will relocate to Tilsen, based on a rule that is strictly related to comparing the price of natural gas in Chester and Tilsen.

   1%
2. B

   Correct81% picked this

   the price of natural gas in Tilsen will

   Why this is right

   If we negate this, it becomes a big weakening idea: the price of natural gas in Tilsen will increase That would allow us to argue that even if the cost of gas in Chester goes up, CC won't necessarily relocate its operations to Tilsen. That doesn't definitively tell us whether it will mean that Chester's price is still twice of Tilsen's, or is more than twice as much, or less than twice as much. But because it creates doubt, it weakens. The author is thinking that since Chester is currently 2x Tilsen, any change to Chester will necessarily make it greater than 2x Tilsen, but in order for that logic to work, you have to hold Tilsen's number constant (or decrease it).

   Skill tested: Necessary Assumption · how this choice captures the argument's function is the move to repeat next time.

   81%
3. C

   Out of Scope: profitable2% picked this

   ChesChem would not be profitable if its energy

   Nothing in this conversation is discussing profits. We're just analyzing a very mathematical cost-of-gas comparison that triggers a relocation.

   2%
4. D

   Too Strong1% picked this

   the only benefit ChesChem would receive by moving its manufacturing operations to Tilsen is

   Too Strong: the only Only Thing Mentioned ? Only Thing If we negate this, would it weaken? CC would receive other benefits in addition to cheaper gas costs, by moving to Tilsen. That would actually strengthen, making it more likely that CC will move to Tilsen. This answer choice does what so many trap answers on Necessary Assumption do. It tries to pretend like "the only benefit we mentioned (lower gas prices) is therefore the only benefit there is."

   1%
5. E

   Reversed Logic of Conclusion14% picked this

   ChesChem will not move its manufacturing operations to Tilsen unless the price of natural gas

   The conclusion says: price of natural gas ? CC moves operations increases in Chester to Tilsen This answer choice says: CC moves operations ? price of natural gas to Tilsen increases in Chester

   14%