jumbo Posted June 15, 2007 Share Posted June 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
jaybird Posted June 15, 2007 Share Posted June 15, 2007 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. Quote Link to comment Share on other sites More sharing options...
hjafferi Posted June 15, 2007 Share Posted June 15, 2007 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 Quote Link to comment Share on other sites More sharing options...
sbyac Posted June 15, 2007 Share Posted June 15, 2007 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 Quote Link to comment Share on other sites More sharing options...
morningstar Posted June 15, 2007 Share Posted June 15, 2007 my pick: A ...btw, this question has been discussed earlier Quote Link to comment Share on other sites More sharing options...
jaybird Posted June 15, 2007 Share Posted June 15, 2007 thanks for the nice breakdown, hjaff. i get it now Quote Link to comment Share on other sites More sharing options...
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