Reading Comprehension

PT157 · S4 · P2 · Q9 Wisdom of Markets

A free, expert breakdown of this official LSAT Reading Comprehension question.

Save & drill this skill — build targeted practice sets from questions like this one
Video walkthroughs — watch every question solved step by step
81 official LSATs — as questions, timed sections & full-length tests

Passage AMarkets, such as stock exchanges, distill the collective wisdom of millions of individuals into a single number, and they do so with amazing efficiency.

Topic

The accuracy and limitations of markets—especially prediction markets—when it comes to gathering and reflecting information.

Framework

Present Debate

Main Point

While markets (including prediction markets) can efficiently aggregate information and often make accurate forecasts, they are not infallible and ultimately reflect the prevailing opinion at a given time rather than any guaranteed insight into the future. **Most Valuable Sentences:** - Passage A: - Passage B:

P1 (Passage A): Markets as Efficient Information Gatherers

Markets (unlike committees or polls) efficiently turn the opinions and knowledge of many individuals into useful predictions or prices, rewarding those who have correct insights.

P2 (Passage A): Example—Prediction Markets

Describes the structure and success of engineered markets like the Iowa Electronic Markets, which use actual money to encourage accurate predictions—sometimes even outperforming polls.

P3 (Passage A): How Markets Rapidly Learn

Explains, via an experiment, how markets can quickly reflect the knowledge of even a small number of informed participants, making everyone act as though they are "in the know" by watching price movements.

The purpose of passage A and the purpose of passage B, respectively, are to

persuade and inform
Wrong Emphasis
We could maybe say that Passage is trying to persuade us that markets are awesome, but it doesn't feel right to call Passage B an informative passage. It seemed to have at least as much opinion as Passage A did, so we definitely wouldn't want to attach the more opinionated purpose to A and the more neutral one to B.
8% picked this
challenge and defend
Wrong Emphasis
Passage B's purpose was clearly to challenge the conventional wisdom about markets. B's author seems to understand she's a heretic going against the grain. It would be a little weird to say that Passage A was "defending" markets, because it gives us no reason to think anyone is attacking markets, but if anything these two words are reversed in terms of which passage better deserves each one.
3% picked this
present and interpret
Wrong Emphasis
This one is doable, but it loses to the correct answer because it does a poorer job of capturing the relationship between the two passages. Passage A does present the topic of "markets" to its audience. Passage B does do some interpreting in its final paragraph: If "prediction markets" do not actually predict the future, then what do they do? I suggest that they ... But would we have ever said that B's main agenda was to interpret? It seems more holistic to think that B sat down to write this piece on markets in order to debunk the idea that they are infallible portraits of reality, rather than just flawed predictions based on the flawed human opinions they're based on. If we were down to 2 between (C) and (E), we want to ask ourselves, which one better captures the relationship between the two passages? Given that Passage A was pro-market and Passage B was anti-market, this answer just doesn't capture the big picture as well as the original.
12% picked this
entertain and educate
Out of Scope
It's hard to say that Passage A was trying to entertain. It was telling us all about markets, and maybe we would find that discussion stimulating, but entertaining? Also, Passage B was writing with an opinionated bent, trying to debunk the esteem that people have for markets. She wasn't trying to educate, which sounds neutral / informative.
1% picked this
Correct
advocate and deflate
Why this is right
This definitely captures the pro-market / anti-market relationship between the two passages. Passage A is a zealot supporter of the power of markets, whereas Passage B's Challenge Position purpose was meant to deflate people's overestimation of markets as something infallible and supremely intelligent. Many of us will probably struggle to accept advocate when it comes to Passage A, especially if we think that the verb connotes the idea of issuing a specific recommendation. Passage A clearly doesn't prescribe that we do something. They're not our doctor advocating that we eat less sodium. But there's also a meaning to advocate that just means support. Passage A certainly supports markets: - they distill wisdom ... with amazing efficiency - they reward people who are right (unlike other information-gathering institutions which can reward those who convincingly lie or have the most prestige behind them) - they are highly 'efficient' If we were debating between the "definitely true, but doesn't capture essence of the relationship well" option of (C) and this "not sure if advocate is too much, but this definitely captures the relationship well", we would have wanted to lean towards making sure the answer did a good job of contrasting the two passages, which is where (E) shines.
Skill tested: Primary Purpose · how this choice captures the passage's function is the move to repeat next time.
76% picked this

Continue the review in LSAT Lab

Save this question, watch the video walkthrough, and drill similar questions in your LSAT Lab account.

Save and practice this skill

LSAT Lab

Turn this review into a targeted study plan.

Save this question, drill more like it, watch the video walkthrough, and track your progress in your LSAT Lab account.

Start practicing free