PT147.S1.Q22

PrepTest 147 - Section 1 - Question 22

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Consumer advocate: Economists reason that price gouging—increasing the price of goods when no alternative seller is available—is efficient because it allocates goods to people whose willingness to pay more shows that they really need those goods. ███ ███████████ ██ ███ ██ ███ ████████████ ██ █████ ██ ███ ████ ██████ ████ ██████ ██████ ██████ ███ ██ ████ ██ ███████ ██ █ ███████ █ █████ ████████ ████ ████████ █████ ██ ███ ██████ ████ ███ ████ ██████ ███ ██ █████ ████ ███ ████ █████

Structure: Counter-Position

The consumer advocate is responding to the economists' argument that price gouging is efficient because it allocates goods to people who are willing to pay more for them, and so clearly really need them.

The consumer advocate responds by rejecting the economists' assumption that people who are willing to pay more need the goods more: "willingness to pay is not proportional to need." She points out that some people just can't afford what other people can. Therefore, she concludes, increasing prices won't allocate goods to people with the most need (as the economists argue), but rather to the people with the most money.

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22.

Which one of the following ████ ██████████ █████████ ███ ████ ██████ ██ ███ ████████ ██████████ ████████ ██ ███ █████ ████ ███████████ ██ ███ ██ ███ ████████████ ██ █████

a

It disputes one ███████████ ██ █████ ██ ████ ███ ███ ██ ███████████ ████████████

Incorrect. (A) assumes that the stimulus is talking about one phenomenon or situation that is agreed upon by both the economists and the consumer advocate, and that the advocate is just contesting the economists' explanation of that phenomenon or situation. So, for example, (A) might work if the advocate were trying to explain why price gouging is efficient, and just rejecting the economists' explanation for this phenomenon.

But that's not the structure of this stimulus. If you're having trouble seeing this, try asking: "an alternative explanation for what?" For what price-gouging is? No, because the author tells us what price-gouging is and doesn't dispute that definition. You might argue that the advocate provides an alternate explanation of what the effects of price-gouging are, but that's not the point at issue. The economists aren't primarily arguing that "price-gouging has effects," but claiming that price-gouging is efficient. And the consumer advocate doesn't try to "explain" the efficiency of price-gouging — she rejects that idea altogether.

So because there's not one agreed-upon thing that the advocate is trying to "explain" in a different way from the economists, (A) doesn't work as an answer choice.

34%
b

It is the ███████ ██████████ ██ ███ █████████

Incorrect. The overall conclusion of the argument is either the final statement about price-gouging allocating goods to people with the most money, or the implied conclusion from that statement that price-gouging is not efficient (i.e., the economists are wrong). Either way, the statement we're looking at is not the main conclusion. A good clue is the "As a result" at the start of the last sentence, which signals that it is supported by the preceding ideas, including the claim that willingness to pay is not proportional to need.
24%
c

It is a █████████ ██ █████████ ████████ ██ ███ █████████

Incorrect. The "reasoning disputed in the argument" is the economists' reasoning. The idea that "willingness to pay is not proportional to need" isn't part of the economists' argument. The economists seem to think that willingness to pay is proportional to need.
4%
d

It is a ███████ █████████ █████ ████████ ███ ████████ ██████████

Incorrect. This statement is part of the advocate's argument. She isn't questioning its validity.
2%
e

It denies a █████ ████ ███ ████████ █████ ██ ██ ███████ ██ ███ █████████ ████ ██ ████████

Correct. (E) fits with what we pre-phrased. The advocate thinks that the economists assume that willingness to pay is proportional to need. This assumption is key to why they think price-gouging is efficient. The advocate directly rejects this assumption.
35%

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