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.

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.

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.

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.

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.

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.

LSAT 131 – Section 2 – Question 02

LSAT 131 - Section 2 - Question 02

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Review Results

LSAT PrepTest 131 Explanations

Section 1 - Logical Reasoning

Section 2 - Logical Reasoning

Section 3 - Logical Reasoning

Section 4 - Reading Comprehension

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