LSAT 150 – Section 3 – Question 21

LSAT 150 - Section 3 - Question 21

June 2018

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT150 S3 Q21
+LR
Evaluate +Eval
Net Effect +NetEff
Link Assumption +LinkA
A
4%
154
B
34%
160
C
29%
161
D
34%
166
E
0%
151
160
169
178
 +Hardest 148.057 +SubsectionMedium

Evaluate

Finance minister tells us that The World Bank runs a list for the Top Countries to Do Business in the World. They look at two things to determine your rankings. LSAT score no just kidding. They look at how easy it is for a hypothetical business to (1) file taxes and (2) comply with regulations. Ease of (1) plus ease of (2) gives you a good rating. If either or both are difficult, then that hurts your rating. The finance minister then tells us that they just made it a lot easier for small-medium sized businesses in their country to file taxes, i.e., to do (1). Okay, so next year their rankings will improve, right? Well maybe.

Here, probably many of you saw the issue with the rankings having two components. The arguments assumes that (2) didn't get any harder. So if we can show that (2) (complying with regulations) either got easier or stayed the same, then that's good for the minister's argument. But if (2) got harder, then it might have offset the gains made in (1) and that would be bad for the argument. So if that's what you had in mind, and you went down into the answer, you should have come up empty handed. No answers said that. (C) doesn't say that. (C) asks if (1) is more difficult than (2). What? We don't care about that! Answer that question either way and it doesn't matter. What we actually care about is if (2)-last-year was more difficult than (2)-this-year. It's the across-time-comparison of (2) to itself that we care about. Not the snapshot-in-time-comparison of (2) to (1).

Anyway, all of that is to hide another gaping hole in the argument. We kind of just assumed that because this person is the finance minister, they'd be talking only about relevant businesses, so we probably didn't even pay attention to when they said (1) was easier for small-medium sized businesses. We probably just assumed that those are the kinds of businesses that the World Bank would take as their hypothetical businesses. But we don't actually know that. What kinds of businesses will the World Bank actually look at when they're assessing the ease of (1) and (2)? We better hope for the Finance Minister's sake that they'll be looking at small-medium sized businesses! That's what (D) gives us.

Finance minister: The World Bank’s “Doing Business” report ranks countries in terms of ease of doing business in them. In producing the rankings, the World Bank assesses how difficult it is for a hypothetical business to comply with regulations and pay taxes. Since the last “Doing Business” report came out, our government has dramatically simplified tax filing for small and even midsized businesses. So our “Doing Business” ranking will probably improve.

Summarize Argument
The finance minister concludes that her country’s “Doing Business” ranking will improve. This is because the country simplified tax filing for small and midsized businesses, and ease of paying taxes is one factor in the “Doing Business” rankings.

Notable Assumptions
The finance minister assumes that there was no corresponding increase in how complex regulations are in her country that might offset the ease of tax filing. She also assumes that the World Bank’s hypothetical business is the size of a small or midsized business in her country.

A
If the finance minister’s country made it easier for small businesses to comply with regulations, would the rate at which new businesses are formed increase?
Irrelevant. The rate at which new businesses are formed doesn’t factor into the “Doing Business” ranking.
B
Has compliance with tax laws by small and midsized businesses increased since tax filing was simplified?
The World Bank cares about how easy it is to pay taxes. Even if tax compliance hasn’t gone up among businesses, ease of paying taxes could’ve still gone up with the new simplified tax filing.
C
For small and midsized businesses in the finance minister’s country, is tax preparation and filing more difficult than complying with other regulations?
Irrelevant. Even if tax compliance is more difficult than complying with other regulations, the new simplified tax filing could’ve still made paying taxes easier. That would improve the country’s “Doing Business” ranking.
D
Is what the finance minister considers to be a midsized business smaller than the hypothetical business used to produce the “Doing Business” report?
If the answer is “yes,” then tax filing hasn’t changed for the World Bank’s hypothetical business; thus, the country’s ranking wouldn’t be likely to improve. If the answer is “no,” then tax filing has indeed been simplified for the World Bank’s hypothetical business.
E
Was the finance minister in office when the last “Doing Business” report was issued?
Totally irrelevant. Whether or not the finance minister was in office has no bearing on if her country’s “Doing Business” ranking will improve.

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LSAT PrepTest 150 Explanations

Section 1 - Reading Comprehension

Section 2 - Logical Reasoning

Section 3 - Logical Reasoning

Section 4 - Reading Comprehension

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