Self-study
The government of Penglai, an isolated island, proposed eliminating outdoor advertising except for small signs of standard shape that identify places of business. ████ ██████ █████████ █████████ ████ ███ ███ █████ ██████ ███ ███████ ██████ ██ ████████ ██ ████████ ████████ ██ █ ██████ ████ ██ ███ ██████████ ██████████ ████ ██ █████ ████████ ███ ███████ ██████████ ████ ████ ███████ ███████████ ███ █ ██████ ██████ █████ ████ █████ ████ ███ ████
The Merchants' Argument
The government wants to eliminate outdoor advertising. The merchants protest that this would reduce the overall volume of business in Penglai. Their evidence: a government report showing that in every industry, businesses that used outdoor advertising had a larger market share than businesses that didn't.
The merchants think that bigger market share for advertisers means outdoor advertising is responsible for growing business, so eliminating it would shrink business.
Market Share vs. Total Volume of Business
There's a difference between market share and total volume of business.
Market share is a proportion. It's your slice of the industry pie. Total business volume is a magnitude. It's the size of the pie.
With outdoor ads
Total volume: 100
Without outdoor ads
Total volume: 100
Same size pie, but with a different distribution. The merchants' data shows different distributions, but doesn't show that the overall pie is bigger.
Outdoor advertising could be doing one of two very different things:
Growing the pie. Bringing in new customers, increasing total industry demand. This is what the merchants assume.
Just shifting slices. Diverting customers from competitors without changing total demand. The advertiser ends up with more customers, but those customers were going to buy from somewhere in the industry anyway.
Either of these hypotheses could explain the merchants' data. If the second story is what's really going on, eliminating outdoor advertising wouldn't reduce overall business; it would just redistribute it among competitors. The merchants haven't ruled out this possibility, so their argument isn't persuasive.
10.
Which one of the following █████████ ██ █████ ██ █████████ ██ ███ ████████████ █████████
a
presupposing that there ███ ██ ████ ███████ ███ ███████████ ███ ███ ██ ███████ ███████████ ██ ███████
The merchants' argument is about a specific consequence of the restrictions: that they would reduce the overall volume of business in Penglai. Whether there are or aren't good reasons to restrict outdoor advertising is a separate question. The merchants don't have to presuppose anything about that to make their economic argument. Their argument can succeed or fail on its own without taking a stance on whether the restrictions are good policy.
b
assuming without giving █████████████ ████ ███ ███████ ███████████ █████████ ██████ █████ ██ ████ █████ █████ ████ ██ █████████ █████ ████ █████████ ██████████
This accurately describes the flaw. The merchants' data shows that advertisers have larger market share than non-advertisers within each industry. That's consistent with two stories. In one, advertising grows total demand by reaching new customers. In the other, advertising just shifts existing customers from competitors who don't advertise to competitors who do. If the second story is what's actually happening, eliminating outdoor advertising would just redistribute business between competitors, not reduce it. The merchants assume the first story without ruling out the second, which is what (B) describes.
c
ignoring the question ██ ███████ ███ ██████████████ ██████ ██ ███ ██████ █████ ██ █████████
(C) faults the merchants for not questioning the survey's objectivity. But the merchants don't need to question it. Their argument takes the survey's data as its starting point, and its job is to reason from that data to a conclusion. Whether the data is trustworthy in the first place is a question about the truth of the premise, not the quality of the reasoning.
d
failing to establish ███████ ███ ████████████ █████████ ███████ ██ ██████████ █████████ ███████ ███████████ ███ █████████ █████████████ ██ ███ ██████ ██ ███████████
(D) faults the merchants for not establishing that the market-share advantage is proportional to the amount of advertising. But the merchants don't need that proportionality. Whether the relationship is precisely proportional (e.g., does $200 in ads buy twice the market-share advantage of $100?) doesn't enter their reasoning. The merchants aren't making a claim about the magnitude of the effect per ad dollar. They're making a claim about whether ads grow the total volume of business at all.
e
disregarding the possibility ████ ███ ██████████████ ████████ ████████████ ███ ████████████████
The merchants' argument is about an economic consequence: whether the restrictions would reduce overall business volume. Whether the restrictions are legal is a totally different question. Even if they were unconstitutional, that wouldn't affect the validity of the merchants' assumption.