Self-study
In most corporations the salaries of executives are set by a group from the corporation’s board of directors. █████ ███ █████████ ███████ ███████ ██ ██ █████████ ███ ████████ ██████ ██ ███ ███████████ ██████ ████ ██ ████ ███ ██████████ █████ ████ ███ ██ ███████ █████████████ ████████ ██ ████████ ██ ███████ ███████████ █████ █████████ ████ ████████ ████ ███████████ ██ █████ ██ ████ ██████████ █████ ████ ████ ███████ ██ █ ███████████████ █████ ███ ██████████ ██████████ ██ ████ ███████████ ███ ███ ██████ ██ ███████ ████ ███████ ████████ ██████████ ███ █████████████ █████████
Structure: Counter-Argument
The stimulus starts by discussing how, in most corporations, a group from the board of directors decides the salaries of executives. The idea behind this procedure is that, since the board of directors is supposed to ensure the corporation stays in good financial shape, they will not set executives' salaries too high.
The author then rejects this line of reasoning. He points out that most members of a corporation's board of directors are also executives of some other corporation. He argues that they can therefore benefit themselves by setting "generous benchmarks" for how much executives get paid. Thus, he suggests that the way most corporations set executives' salaries won't necessarily achieve the goal of keeping executives' salaries from being excessively large.
Analysis: Rephrase Argument
This is an unusual question. It's basically testing our understanding of the argument in the stimulus, and specifically asking us to rephrase the support the author provides for his suggestion that the way most corporations set executive salaries won't necessarily keep those salaries from being too large. The author's premise is that most directors — i.e., most of the people who could be chosen to set executive salaries at any given company — are themselves executives elsewhere. This gives them an incentive to set a "generous benchmark" for executive salaries. In other words, they are motivated to set a high standard for executive salaries at the corporations where they are directors, presumably because this might cause their own salaries to be raised at the companies where they are executives.
15.
Which one of the following █████████ ██ ██████████ ██ █ ████ ██ █████████ ████ ████████ ██ ████ ████ ██ ███ ████████ ██ ███ ████████
a
in medical malpractice ██████ ██████ ██████████ ███ ████████ ████████ ██ █ ████ █ █████ ████ ██ ███████████ ███ ███████ ███ ██ ██████████ ██████████
Correct. As in the stimulus, we have a group of people who have a mission that doesn't immediately affect them: in the stimulus, it was the board of directors setting salaries for executives of a corporation, not for themselves; here, it's physicians determining appropriate damages in medical malpractice cases where they're not directly involved.
Likewise, as in the stimulus, this group has a personal background that might incentivize them to make a certain decision for their own potential future benefit. Most members on the board of a corporation are executives at other companies, which gives them an incentive to set large executive salaries so as to set a higher benchmark for executive salaries in general. We can imagine criticizing the practice in (A) as saying that physicians in this position would potentially benefit themselves in the future, if they were ever sued for malpractice, by determining that lower damages are due.
b
in a legislature, ████████ ███ ███████████ ██ ████████ █████ ███ ████████ ████ ██ ██ █████ ██████████ ██ ████ ████ ██ █████ ██ ██ ████████
Incorrect. This is a tricky answer choice, and it forces us to refine our analysis of the stimulus and the parallel scenario we're looking for. Like the stimulus and (A), (B) describes a situation where a group of people might be incentivized to make a certain decision in order to benefit themselves: legislators would be incentivized to vote in favor of an increase so they can increase their own salaries.
But unlike the stimulus and (A), (B) is describing a group of people who can directly benefit themselves. The legislators are voting to be able to increase their own salaries. Meanwhile, both the stimulus and (A) describe a group of people in charge of determining something for someone else, that doesn't directly affect them: directors assigning salaries for the executives of a company where they aren't executives, and physicians determining damages in malpractice cases where they aren't involved. The point is that these people might make a certain decision involving other people, in the hopes that a similar decision might later be applied to them. The point is not just that some people are self-interested in making decisions directly affecting themselves. So (A) more closely parallels the stimulus than (B) does.
c
on a factory ██████ ██████ ███████ ██ █████████ ██ ████ ████ ████ ███ ██████████ ██ ██████ ████ ██ ███ █████ ███ ████████ ████ ██████ ██ ██████████ ███████
Incorrect. It's not clear who is determining what counts as good quality, and whether those people would be motivated to make a certain decision in the hopes that that decision would be applied to them in the future. So (C) isn't open to the same criticism as the stimulus.
d
in a sports ███████████ ███████ ██ █████████ ███████ █████████ ███ ██████ ████ █████ ██████ ███████ ████ ████ █████ █████ ██████████ ███████
Incorrect. This would more accurately parallel the scenario in the stimulus if the judges were current athletes. In that case, we'd have a similar situation where people would be motivated to make a certain decision because that decision might be applied to them in the future: the judges would want to make certain judgments so that they could be judged more favorably when they returned to competition. But since these judges are retired athletes, it's not clear that they would be motivated by the same element of self-interest in their decisions.
e
in a business █████████████ ████████████ █ █████ █████ █████ ███ ███████ ██ █ ████ █████ ██ ███ █████ ██ █ ████████████ ███████████ ██ ████ ███████ ██ ███ ████████████ ████ ██ ████ ██ ███ ██████
Incorrect. Like (B), (E) describes a situation where people's decisions directly affect them. We don't have a group of people here who are making decisions affecting a separate group of people, in hopes that a similar decision might be applied to them in the future.