disagree with CR

[natzmyid]

The exchange rate between the currency of Country X and that of Country Y has historically favored the currency of Country Y. Because of this, citizens of Country Y often take their vacations in Country X, where the exchange rate makes hotels and restaurants more affordable. Yet, citizens of Country Y rarely purchase clothing or electronics in Country X, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account.

Which of the following, if true, would best explain the buying habits of the citizens of Country Y?
A.Citizens of Country Y prefer the fashions available in their own country.
B.Stores in Country X receive the latest fashions and technology several months after they are available in Country Y.
C.The citizens of Country X resent the buying power of the currency of Country Y.
D.The government of Country Y imposes tariffs on imported goods.
E.The currencies of Country X and Country Y are both weak compared to the currency of Country Z.

I agree that B makes an assumption that many people in X buy the latest.
But E too makes the assumption that all clothes and electronics available in country X are imported.
B seems more plausible.

Aren't they, atleast, equally flawed. Or am I missing something....

Answer is D. My answer was B.

[venkat_yj]

I think you meant "D" and not "E" in your comment - "I agree that B makes an assumption that many people in X buy the latest. But E too makes the assumption that all clothes and electronics available in country X are imported."

The way I read the question and the answer choices, I understood D as referring to tariffs on (home-coming) citizens of Country Y on goods purchased in Country X.

I did not intepret this as citizens of Country Y purchasing Imported goods in Country Y.

[natzmyid]

oh yes, another careless one ..i misread that the tariffs were in country X.
It makes perfect sense.

Thanks!

[Ben Ku]

The main point of this argument is that it's cheaper for citizens of Y to travel to X. An explanation of why those citizens don't buy much may have something to do with it being more expensive to buy things from X. Answer choice (D), paying the tariffs (import taxes) can make it MORE expensive to buy things from X than from Y.

[NIKESH_PAHUJA]

I believe A also makes sense.

The question asks us to explain for buying habit of people of country Y.
If I like clothing made in my country only, I wont buy that from any other country, No matter how cheap i get it from there.

So i think A should be the answer.

[RonPurewal]

I believe A also makes sense.

The question asks us to explain for buying habit of people of country Y.
If I like clothing made in my country only, I wont buy that from any other country, No matter how cheap i get it from there.

So i think A should be the answer.

the problem is that the observed trend doesn't apply only to clothing.

if the observed trend were limited to clothing, then choice (a) would be a good answer.
however, since the trend extends beyond clothing to electronics, (a) is useless in explaining that more general observation.

we need something that explains the entire scope of the observed trend, an observation that explains why (a) is incorrect.

[acrum]

The logic doesn't add up, especially when you take into consideration these two phrases:

• In the argument: "... citizens of Country Y rarely purchase clothing or electronics in Country X"


• In answer choice D: "Country Y imposes tariffs on imported goods."

The answer choice incorrectly uses the word "imported". Imported means buying something FROM another country. If you go to another country and buy something there, you are not buying FROM that country, you are buying IN that country.

If the Government of Country Y imposed tariffs on imported goods, then the citizens of Y would go to Country X to buy those same goods because then, the they would not be buying those goods FROM Country Y (importing). Instead, they would be buying them IN country Y (not importing).

Furthermore, the reason why "those items" are more expensive in Country Y is because the Government of Country Y imposed a tariff on importing those goods from Country X.

I disagree with the logic of why D is the correct choice, though I now see that D is the "best" choice out of all the other choices. (A and B are scope issues. C says nothing about the citizens of Country Y. E, no other information about Country Z).

This is one of countless examples of CR questions that worry me on test day. I worry that I would get one of these wrong and I would never know the correct answer. However, if I was shown the correct answer, I'd petition the GMAT writers for them to pick up a dictionary every once and a while. I guess this might be one of the reasons you are never shown the correct answers--there'd be too many angry mobs.

[RonPurewal]

The answer choice incorrectly uses the word "imported". Imported means buying something FROM another country. If you go to another country and buy something there, you are not buying FROM that country, you are buying IN that country.

nope. the word "import" is used whenever goods are brought permanently into a country. it's actually immaterial whether the goods are brought by the seller or by the buyer.

for instance, see here:
* http://www.australia.gov.au/topics/econ ... -australia
* http://www.customs.gov.au/site/page.cfm?u=4371
* http://www.cbp.gov/xp/cgov/trade/basic_ ... ng_car.xml

[rkim81]

The answer choice incorrectly uses the word "imported". Imported means buying something FROM another country. If you go to another country and buy something there, you are not buying FROM that country, you are buying IN that country.

I agree with you here and disagree with the post above mine. The GMAT makes assumptions based on what people know about things. For instance, that a TV is a TV and not a microwave. When I saw imported I immediately thought of large amounts of good moving into a country for commercial purposes, not consumption and therefore eliminated D. I usually think of duty tariffs or customs tax at the airport and not "import" tax.

The logic of the answer choice is sound and DOES explain the situation if it furthered showed that these tariffs made it more expensive than to buy these same goods in Y but it doesn't, hence I eliminated D.

(A and B are scope issues. C says nothing about the citizens of Country Y. E, no other information about Country Z).

If you eliminate D, then B is the best choice. It's not unreasonable to assume that people do not want to buy out of fashion products regardless of price. And this answer choice beats A because A's scope is limited while every other answer is irrelevant and doesn't explain the situation as best as B.

This is one of countless examples of CR questions that worry me on test day. I worry that I would get one of these wrong and I would never know the correct answer.

I feel you on this point. Guess there's nothing we can do and hope that these kinds of questions comprise the 25% of experimental questions on test day and won't count as much as the rest. This isn't a real GMAT CR question, it was made by MGMAT, who does do great work, but can be fallible,and CR questions are hard to make.

Try doing some LSAT logical reasoning questions for additional practice. I find them to be really helpful because they're longer and thicker (generally harder) than GMAT questions but come in the same format as GMAT questions. It's just good practice to keep you sharp.

[RonPurewal]

I agree with you here and disagree with the post above mine. The GMAT makes assumptions based on what people know about things.

not true, unfortunately.

the gmat is quite well known for using common terms in their most formal usage, even if that usage conflicts with popular usage.
for instance, in popular usage, "an item sells for $x" can mean either (1) somebody actually buys the item for $x, or (2) the item is offered for sale at a price of $x, whether somebody buys it or not. despite this ambiguity, the gmat will happily use "sell" ONLY in the first of these usages -- since that's the only one of them that is technically correct in formal usage.

the same goes for "import". as long as the formal usage of this term is not ridiculously obscure (and this isn't -- many people know that "import" can be used for any bringing of goods across the border, although many don't know this), you may see such usages on the test.

in any case, the test absolutely DOES NOT kowtow to "common sense". after doing enough "find the assumption" and "draw the conclusion" questions, you should definitely know this.

It's not unreasonable to assume that people do not want to buy out of fashion products regardless of price.

no, it's not unreasonable -- but it's still a COMPLETELY unjustified assumption!! the point is not whether something is "reasonable"; after all, just about every assumption made in these answer choices, whether justified or not, will at least be "reasonable". it would just be too easy to eliminate an "unreasonable" choice, so they won't give you much of that.
never make unjustified assumptions!

[rishi_1008]

Is it not a assumption that import duty is so high that the total price of items from country X becomes higher than the price of similar items from country Y ?

Ex : Item A costs $ 10 in country X
Import duty $ 2 (assumed)
Total price $ 12

Price of similar item in country Y may be $ 15.

In such a case person would still prefer to buy item from country X.

[tim]

the point here is that import duties could help explain the discrepancy. sure, this would not happen if the tariffs were not high enough to preclude buying items in X, but the question asks what could best explain the discrepancy. IF the tariffs were sufficiently high, then that would totally explain why people don't buy these items in X..

[uae918]

the question stated "yet, citizens of country Y rarely purchase clothing or electronics in country x, despite the fact that those items are more expensive in their home country, even when sales taxes are taken into account"

Aren't sales taxes usually applied when you literally pay for the item you purchase at the store? at that point shouldn't the price already included tariff if any? I was torn between B and E but went with B because I thought that sales tax should the last thing added to the product price, so it seems like the cost at the point already included tariff.

Can you please let me know what is the flaw with that reasoning?

[Sage Pearce-Higgins]

This problem definitely has a slight bias towards the US experience: in the US prices displayed in a shop typically don't include a sales tax, so that, say, a coat marked $100 may actually cost $110 at the checkout, where sales tax is added.

However, this is not to be confused with an import tariff, applied at the border. This is an additional charge that one pays for importing a good, and is extra to the sales tax.

I think the problem is trying to be confusing - the point about sales tax is mostly there as a distraction. At root, it's a simple scenario: imagine an item cost $10 in Country X, and $11 in Country Y. However, residents of Country Y don't purchase the item in Country X - why? Well, perhaps the residents of Country Y would have to pay a 20% import tax if they purchased the item in Country X, making it cheaper overall to pay $11 in Country Y.