LSAT 131 – Section 2 – Question 02

LSAT 131 - Section 2 - Question 02

December 2009

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT131 S2 Q02
+LR
Point at issue: disagree +Disagr
Value Judgment +ValJudg
A
7%
155
B
1%
155
C
0%
153
D
91%
165
E
1%
158
135
143
151
 +Medium 147.936 +SubsectionMedium

Price: A corporation’s primary responsibility is to its shareholders. They are its most important constituency because they take the greatest risks. If the corporation goes bankrupt, they lose their investment.

Albrecht: Shareholders typically have diversified investment portfolios. For employees, however, the well-being of the corporation for which they have chosen to work represents their very livelihood. The corporation’s primary responsibility should be to them.

Speaker 1 Summary
Price says that a corporation’s primary responsibility is to its shareholders. Why? Because shareholders take the biggest risks. And what risks are those? Well, if the company goes under, the shareholders lose their investment.

Speaker 2 Summary
Albrecht says that a corporation’s primary responsibility should instead be to its employees. Why? Firstly, shareholders usually have many investments (meaning their risk in a single company isn’t all that great). Secondly, an employee’s entire livelihood is at risk if the company goes bankrupt. This implies that employees actually take a greater risk, making them a more important responsibility.

Objective
We need to find a disagreement between Price and Albrecht. They disagree about whether shareholders or employees take the greatest risks, and should therefore be a company’s primary responsibility.

A
corporations have a responsibility to their shareholders
Price definitely agrees with this, but Albrecht never disagrees. Albrecht thinks that shareholders shouldn’t be the primary responsibility of a corporation, but that doesn’t mean the corporation has no responsibility at all towards shareholders.
B
corporations are responsible for the welfare of their employees
Albrecht agrees with this, but Price doesn’t express disagreement. Price doesn’t think that employees are the primary responsibility of a corporation, but that doesn’t mean that corporations have no responsibility towards employees at all.
C
means should be provided for a corporation’s investors to recoup their losses if the corporation goes bankrupt
Neither speaker talks about contingency measures in the case a corporation goes bankrupt. Price and Albrecht’s discussion is about who has the most to lose in a company’s bankruptcy, not what measures could help lower that risk.
D
a corporation’s shareholders have more at stake than anyone else does in the corporation’s success or failure
Price agrees with this but Albrecht disagrees, so this is the point of disagreement. Price claims that shareholders’ investments make them the group with the most to lose in bankruptcy. Albrecht, however, thinks employees risk more with the possible loss of their livelihoods.
E
the livelihood of some of the shareholders depends on the corporation’s success
Neither speaker makes this claim. This is compatible with both Price’s and Albrecht’s arguments, but neither of them discusses one way or another if any shareholders’ livelihoods depend on a company’s success.

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LSAT PrepTest 131 Explanations

Section 1 - Logical Reasoning

Section 2 - Logical Reasoning

Section 3 - Logical Reasoning

Section 4 - Reading Comprehension

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