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Thread: cigarette prices...

  1. #1
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    cigarette prices...

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    In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. Coponia is about to raise taxes on cigarettes by 9 cents per pack. The average price of cigarettes in Coponia is and has been for more than a year 90 cents per pack. So the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.

    Which of the following is an assumption on which the argument depends?

    A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia.

    B. Previous increases in cigarette prices in Coponia have generally been due to increases in taxes on cigarettes.

    C. Any decrease in per capita sales of cigarettes in Coponia will result mainly from an increase in the number of people who quit smoking entirely.

    D. At present, the price of a pack of cigarettes in Coponia includes taxes that amount to less than ten percent of the total selling price.

    E. The number of people in Coponia who smoke cigarettes has remained relatively constant for the past several years.

  2. #2
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    I would go with D. If you negate it, the 9 cents hike is no longer 10 percent so there will not necessarily be a 4 percent change.

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    An Urch Guru Pundit Swami Sage hjafferi's Avatar
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    IMO A

    Premise : Increase in cigerate prices leads to decrease in cigrette consumption
    Premise : increase in tax
    Conculation : Cigrette consumption will drop

    Assumption : All other things will remain same

    A is the correct answer
    B. Out of scope
    C. out of scope
    D. so what the new tax will increase the price by 10%. if the increase in tax is not absorbed in the price the price of the pack will rikse
    E. irrelevant

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    Eager! sbyac's Avatar
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    [quote=hjafferi;460607]IMO A

    Premise : Increase in cigerate prices leads to decrease in cigrette consumption
    Premise : increase in tax
    Conculation : Cigrette consumption will drop

    Assumption : All other things will remain same

    A is the correct answer
    ..
    .....
    ...............

    .................
    Ditto

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    my pick: A

    ...btw, this question has been discussed earlier

    be the light!

  6. #6
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    thanks for the nice breakdown, hjaff. i get it now

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