1000CR Set 2 - Q 4

[ranjeet_1975]

Sales taxes tend to be regressive, affecting poor people more severely than wealthy people. When all purchases of consumer goods are taxed at a fixed percentage of the purchase price, poor people pay a larger proportion of their income in sales taxes than wealthy people do.
It can be correctly inferred on the basis of the statements above that which of the following is true?
(A) Poor people constitute a larger proportion of the taxpaying population than wealthy people do.
(B) Poor people spend a larger proportion of their income on purchases of consumer goods than wealthy people do.
(C) Wealthy people pay, on average, a larger amount of sales taxes than poor people do.
(D) The total amount spent by all poor people on purchases of consumer goods exceeds the total amount spent by all wealthy people on consumer goods.
(E) The average purchase price of consumer goods bought by wealthy people is higher than that of consumer goods bought by poor people.


OA is

SPOILER: B

I have opted D because if total amount spent on consumer goods is more for poor people than rich people, the sales tax is also more for poor people, isn't it.

[yashesha]

B is the answer.

conclusion should be deduced from the premises and nothing more...

The passage concludes -" Sales taxes tend to be regressive, affecting poor people more severely than wealthy people"

This is supported by the fact that:
1 Sales tax charged at fixed rates; and
2 poor ppl pay a larger portion of their income in sales tax

B correctly summarizes the same and does not assume anything more...

D .is incorrect ..in fact out of scope ...as the pasage never talked abt which class of ppl spend more purchase of consumer goods...