PT103.S3.Q24 > Analytics

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PASSAGE 1

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The author concludes that individuals who buy new cars today spend, on average, a larger amount relative to their incomes on a car than individuals spent 25 years ago. This is based on the fact that over the last 25 years, the average price paid for a new car has steadily increased in relation to the average individual income.

The author assumes that the proportion of individuals who are buying cars today hasn’t significantly gone down. After all, if the proportion of individuals who buy cars has gone down, then it’s possible individuals still spend the same proportion of their income on cars; but other buyers (such as families or businesses) are paying a higher price and raising the average price of a car.

So, a higher proportion of households have more than one wage earner. But we’re talking about “individuals who buy new cars.” (A) doesn’t suggest that more households are buying a new car together.

The stimulus concerns changes in average price of a new car in relation to average income. The number of cars sold doesn’t affect average price of a car.

If income has gone down, that tends to support the position that individuals who buy new cars are spending a higher portion of their income than such individuals did 25 years ago.

The stimulus concerns changes in average price of a new car in relation to average income. How many new cars are bought in relation to the population doesn’t affect the average price of a new car or how it relates to the average income.

This shows how the increase in average new car price can be explained by a greater portion of sales to non-individuals (such as a business). So, the increase in average price in relation to individual income doesn’t have to mean individuals are paying more for their cars.

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Score of students with a 50% chance of getting this right

25% 162

174

75% 180

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33%

167

159

21%

164

163

37%

170

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PrepTest 103 - Section 3 - Question 24

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