PT5.S3.Q15

Platinum

Please help explain this question.

canihazJD

Let me take a look. Aside: as opposed to just asking for an explanation, consider explaining your thoughts on this question, and where you're getting tripped up. I think it would be beneficial for you as well as the for rest of the community.

Edit: Ok got it.

The Scorpio Miser with its special high efficiency engine costs more to buy than the standard Scorpio sports car.

At current fuel prices, a buyer choosing the Miser would have to drive it 60,000 miles to make up the difference in purchase price through savings on fuel.

It follows that if fuel prices fell, it would take fewer miles to reach the break-even point.

So...

SM costs more than M but is more efficient.
At current fuel prices, the extra cost is made up for by gas savings at 60k miles.
So if fuel prices fall, you’d break even in less miles.

Flaw: reasoning is backwards… fuel prices falling would increase the miles needed to break even. The higher the price of fuel the greater the savings.

SM @10 mpg
@$10/g, 10g of fuel costs $100 - gets us 100 miles
@$5/g, 10g of fuel costs $50 - gets us 100 miles

S @5 mpg
@$10/g, 20g of fuel costs $200 - gets us 100 miles
@$5/g, 20g of fuel costs $100 - gets us 100 miles

So…

@$10/g the SM saves $100 over 100 miles of travel.
@$5/g the SM saves $50 over 100 miles of travel.

To save the maximum amount of money in the least amount of time, we want the price of fuel to be higher.

Distractor flaw: fuel prices are the only factor.

A.
Interest - inflation = earnings
So if inflation drops, the rate of interest can be reduced -

Nope, already not our flaw.

B.
P allows for premium foods
A does not
P uses more electricity
Higher profit on premium foods
If electric rates fell, a lower volume of premium food sales would justify choosing P

This sounds ok. So not flawed thus not our answer.

C.
R paves a mile in less time than C
C is less expensive
R uses less staff and eventually compensates for higher price
So R is advantageous when wages are low.

This is the answer. Same flaw - R would be more advantageous when wages are high, not low because the C model would be paying our far more in wages than with R. Higher wages = greater difference = more savings for R.

Given the huge time sink this question is, I would move on after this answer… I also assume this would be in the second round. Eliminating D and E would likely be very low priority… for me anyway.

D.
IS fruits younger and lives longer
SS larger when mature, but you cant fit as many
So new planting should all be IS

I mean maybe? Don’t really have enough info. Regardless, this isn’t the same flaw, nor does it have the same structure.

E.
S dividends vary
B interest constant
Since B interest does not decrease
Investors who want a reliable income should choose bonds.

Exact same reasons as D for elimination.

Platinum

Conclusion: If fuel prices fell, it would take fewer miles to reach the break-even point.

Premise: At current fuel prices, a buyer choosing the Miser would have to drive it 60K miles to make up the difference in purchase price through savings on fuel.

Premise: The Scorpio Miser with its special high-efficiency engine costs more to buy than the standard Scorpio sports car.

Example:
It costs $40 to fill up the tank:

Scorpio Miser costs 10K a year in gas to run
Standard Scorpio costs 20K a year to run
A savings of 10K a year when buying Scorpio Miser

All of a sudden gas drops and we pay $20 to fill up the tank

Scorpio Miser costs 5K a year in gas to run
Standard Scorpio 10K a year to run
Savings no only 5K if Miser is bought. It will take longer to make up the difference because the savings is half as much per year.

A)Valid
B)Valid
C)Correct Answer because of the same problem.
The Roadmaker is faster. The other model is less expensive.
The Roadmaker allows fewer people for work and the reduction in staffing cost is balanced out by higher price. Thus, Roadmaker is advantageous when wages are low.
But that is opposite of what’s true. It’s most advantageous when wages are high, because each person no longer on the job results in bigger savings.
D) The conclusion doesn’t match the original even though the argument is flawed.
E) Valid and the conclusion doesn’t match the original

Platinum

@canihazJD said:
Let me take a look. Aside: as opposed to just asking for an explanation, consider explaining your thoughts on this question, and where you're getting tripped up. I think it would be beneficial for you as well as the for rest of the community.

Edit: Ok got it.

The Scorpio Miser with its special high efficiency engine costs more to buy than the standard Scorpio sports car.

At current fuel prices, a buyer choosing the Miser would have to drive it 60,000 miles to make up the difference in purchase price through savings on fuel.

It follows that if fuel prices fell, it would take fewer miles to reach the break-even point.

So...

SM costs more than M but is more efficient.
At current fuel prices, the extra cost is made up for by gas savings at 60k miles.
So if fuel prices fall, you’d break even in less miles.

Flaw: reasoning is backwards… fuel prices falling would increase the miles needed to break even. The higher the price of fuel the greater the savings.

SM @10 mpg
@$10/g, 10g of fuel costs $100 - gets us 100 miles
@$5/g, 10g of fuel costs $50 - gets us 100 miles

S @5 mpg
@$10/g, 20g of fuel costs $200 - gets us 100 miles
@$5/g, 20g of fuel costs $100 - gets us 100 miles

So…

@$10/g the SM saves $100 over 100 miles of travel.
@$5/g the SM saves $50 over 100 miles of travel.

To save the maximum amount of money in the least amount of time, we want the price of fuel to be higher.

Distractor flaw: fuel prices are the only factor.

A.
Interest - inflation = earnings
So if inflation drops, the rate of interest can be reduced -

Nope, already not our flaw.

B.
P allows for premium foods
A does not
P uses more electricity
Higher profit on premium foods
If electric rates fell, a lower volume of premium food sales would justify choosing P

This sounds ok. So not flawed thus not our answer.

C.
R paves a mile in less time than C
C is less expensive
R uses less staff and eventually compensates for higher price
So R is advantageous when wages are low.

This is the answer. Same flaw - R would be more advantageous when wages are high, not low because the C model would be paying our far more in wages than with R. Higher wages = greater difference = more savings for R.

Given the huge time sink this question is, I would move on after this answer… I also assume this would be in the second round. Eliminating D and E would likely be very low priority… for me anyway.

D.
IS fruits younger and lives longer
SS larger when mature, but you cant fit as many
So new planting should all be IS

I mean maybe? Don’t really have enough info. Regardless, this isn’t the same flaw, nor does it have the same structure.

E.
S dividends vary
B interest constant
Since B interest does not decrease
Investors who want a reliable income should choose bonds.

Exact same reasons as D for elimination.
Thank you.

Help2222

Looking at Question 15: The Scorpio Miser with its special high-efficiency engine costs more to buy than the standard Scorpio sports car. At current fuel prices, a buyer choosing the Miser would have to drive it 60,000 miles to make up the difference in purchase price through savings on fuel. (Therefore), It follows that, if fuel prices fell, it would take fewer miles to reach the break-even point.
Since this is a flaw question this conclusion is flawed. For example, if fuel prices were $.10 @ gallon times 60,000 = 6,000. But if fuel prices fell to say, $.05 @ gallon times 60,000 is 3000. So this is the flaw, the reverse is true, fuel prices need to go up to make this true.
This is reflected in answer choice (C). Here the Roadmaker savings accrue when wages are higher. Just like in the stimulus. But it says the Roadmaker is advantageous when prices are low.

Platinum

Thank you> @Help2222 said:

Looking at Question 15: The Scorpio Miser with its special high-efficiency engine costs more to buy than the standard Scorpio sports car. At current fuel prices, a buyer choosing the Miser would have to drive it 60,000 miles to make up the difference in purchase price through savings on fuel. (Therefore), It follows that, if fuel prices fell, it would take fewer miles to reach the break-even point.
Since this is a flaw question this conclusion is flawed. For example, if fuel prices were $.10 @ gallon times 60,000 = 6,000. But if fuel prices fell to say, $.05 @ gallon times 60,000 is 3000. So this is the flaw, the reverse is true, fuel prices need to go up to make this true.
This is reflected in answer choice (C). Here the Roadmaker savings accrue when wages are higher. Just like in the stimulus. But it says the Roadmaker is advantageous when prices are low.