Pack of cigarttes and tax - CR

[cetspeck]

Could answer choice (D) be understood in another way?

If a tax has just been applied to a product AND consumers simultaneously have less money, then it seems that consumers would be even less inclined to purchase that item than they would be if the tax on that item had not been increased.

In other words, if you have less money and the price (with tax) of a product has NOT gone up, then you might be more likely to buy that product than if you have less money and the price (with tax) of that product HAS gone up.

Perhaps the problem with (D) involves the language used?
For one thing, it says "many" consumers, and we don't know whether people buying cigarettes fall into that group. In contrast, (B) refers to "consumers." Can (B) be understood to refer to ALL consumers?

Second, does one have to make an assumption (see the use of the word "might" above) about people's potential buying behavior if they have less money and the tax on an item goes up? They might have less money, but they might still buy an item on which the tax has been increased. Or they might not.

[RonPurewal]

Could answer choice (D) be understood in another way?

If a tax has just been applied to a product AND consumers simultaneously have less money, then it seems that consumers would be even less inclined to purchase that item than they would be if the tax on that item had not been increased.

In other words, if you have less money and the price (with tax) of a product has NOT gone up, then you might be more likely to buy that product than if you have less money and the price (with tax) of that product HAS gone up.

Perhaps the problem with (D) involves the language used?
For one thing, it says "many" consumers, and we don't know whether people buying cigarettes fall into that group. In contrast, (B) refers to "consumers." Can (B) be understood to refer to ALL consumers?

i think you're not paying enough attention to the actual issue in the argument.
the issue is this: did people buy fewer cigarettes BECAUSE the after-tax price decreased, or for some other reason?
anything pointing to "...because the price decreased" is a strengthener.
anything pointing to "... for some other reason" is a weakener.

if people's income went down -- even if it were only some people's income -- then that definitely points to "some other reason" (where the other reason is that people had less money to spend!)
so, that choice weakens the argument. that's exactly the opposite of what we want.

Second, does one have to make an assumption (see the use of the word "might" above) about people's potential buying behavior if they have less money and the tax on an item goes up? They might have less money, but they might still buy an item on which the tax has been increased. Or they might not.

on strengthen/weaken assumptions, you are supposed to make the most reasonable / most common-sense assumption about the statements.
for instance, if you see "At the emergency room, patient X had injuries characteristic of someone hit by a large vehicle", then you go ahead and assume that patient X was hit by a large vehicle. you do not go the route of, "well, maybe something else happened that left the same type of injuries".

this is why there are so many of these problems on the test (at least half of all CR problems are strengthen/weaken) -- because, above all else, the test writers want to make sure that you can interpret situations in a real-world / common-sense sort of way.
note: if you come from a tech background, especially if you are a programmer (in which the thought process is "let me think of anything that can possibly go wrong with this code, no matter how remote"), it's going to take some effort to move back to thinking in this sort of way.

[ganpathi]

Doesn't choice C also eliminate a potential cause to the effect that cigarette sales decrease is due to after-tax price?

My reasons: If consumers were aware of the tax increase, they would have bought more cigarette packs before such increase (this is a very reasonable assumption just as assuming health risks to be a cause of declining sales for choice B).

Logic: Aware beforehand so consumers buy more --> After increase consumers do not buy or buy at a normal rate --> hence the 'comparitive' decrease.

Is my argument anywhere close to sensible thinking?
Thanks!

[RonPurewal]

Doesn't choice C also eliminate a potential cause to the effect that cigarette sales decrease is due to after-tax price?

My reasons: If consumers were aware of the tax increase, they would have bought more cigarette packs before such increase (this is a very reasonable assumption just as assuming health risks to be a cause of declining sales for choice B).

Logic: Aware beforehand so consumers buy more --> After increase consumers do not buy or buy at a normal rate --> hence the 'comparitive' decrease.

Is my argument anywhere close to sensible thinking?
Thanks!

this doesn't work. in general, the statements "if X happens, then Y will happen" and "if X doesn't happen, then Y won't happen" are unrelated to each other.

for instance,
if i win the lottery, then i will be very happy
--> according to your logic, this would mean that i will actually be unhappy if i don't win the lottery.
i think you see the problem here.

[soulwangh]

Doesn't choice C also eliminate a potential cause to the effect that cigarette sales decrease is due to after-tax price?

My reasons: If consumers were aware of the tax increase, they would have bought more cigarette packs before such increase (this is a very reasonable assumption just as assuming health risks to be a cause of declining sales for choice B).

Logic: Aware beforehand so consumers buy more --> After increase consumers do not buy or buy at a normal rate --> hence the 'comparitive' decrease.

Is my argument anywhere close to sensible thinking?
Thanks!

this doesn't work. in general, the statements "if X happens, then Y will happen" and "if X doesn't happen, then Y won't happen" are unrelated to each other.

for instance,
if i win the lottery, then i will be very happy
--> according to your logic, this would mean that i will actually be unhappy if i don't win the lottery.
i think you see the problem here.

Hi, Ron

I am confused. If my reasoning is wrong, Please help me!

I think C is wrong not because the validity of "if A, then B" has nothing to do with the validity of "if not A, then not B",but because C is at best an irrelevant choice and at worst a weaken choice. The reasons are as follows.

1/

anything disrupting the CAUSAL relationship between cigarette tax and cigarette consumption --> i.e., any ALTERNATIVE EXPLANATION FOR WHY THE TWO ARE CORRELATED --> will ruin the argument.
therefore, you can STRENGTHEN the argument by DISPENSING with such explanations.

this is what choice (b) does. one possible alternative explanation is that consumers may have become more educated about the dangers of cigarettes, leading them to smoke fewer cigarettes regardless of the tax. this choice eliminates that possibility.

in general, STATEMENTS OF CAUSE AND EFFECT are stronger if OTHER VARIABLES ARE "CONTROLLED" -- i.e., if NO other variables, apart from the variables under control, are allowed to change.
choice (b) keeps one such variable (the amount of information available to consumers) controlled

According to what you said, this question is a correlation to causation problem, and this kind reasoning assumes A is the only causal factor of B. If the choice can rule out any competing causal factor, it strengthens the argument.

IMO,the rule that the validity of "if A, then B" has nothing to do with the validity of "if not A, then not B" may not be applicable here. Because "if A, then B" reasoning does not require that A is the only causal factor of B.

2/

In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent. In contrast, in the year prior to the tax increase, sales had fallen one percent. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.

Which of the following, if true, could most strengthen the argument above?

(A) During the second year after the tax increase, cigarette sales increased by a significant amount.
(B) The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.
(C) Most consumers were unaware that the tax on cigarettes was going to increase.
(D) During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.
(E) During the year after the tax increase, there was a greater variety of cigarettes on the markey than there had been during the previous year.

In my personal opinion, C is wrong because people's awareness about the tax and their buying behavior are still related to the after-tax price of a pack of cigarettes and consequently are not an competing explanation.

Please correct me if I am wrong.

Thanks in advance!

[RonPurewal]

In my personal opinion, C is wrong because people's awareness about the tax and their buying behavior are still related to the after-tax price of a pack of cigarettes and consequently are not an competing explanation.

Please correct me if I am wrong.

Thanks in advance!

The argument focuses on the correlation between the volume of cigarette sales and the current price. (The argument just says "the price", but of course that means the current price, not a theoretical future price.)

If the consumers had been aware of the impending tax increase, then it's quite likely that they just loaded up on cigarettes while the price was still cheaper. In that case, their behavior would not have been motivated by the (current) price itself, but, rather, by the shadow of an impending price increase. (Once their stash is depleted, these consumers will presumably return to their normal buying behavior.)

[soulwangh]

The argument focuses on the correlation between the volume of cigarette sales and the current price. (The argument just says "the price", but of course that means the current price, not a theoretical future price.)

If the consumers had been aware of the impending tax increase, then it's quite likely that they just loaded up on cigarettes while the price was still cheaper. In that case, their behavior would not have been motivated by the (current) price itself, but, rather, by the shadow of an impending price increase. (Once their stash is depleted, these consumers will presumably return to their normal buying behavior.)

Hi, Ron

Thanks for replying!
You clarify one of my questions. Some questions still remain. Need help and correct my wrong reasoning!

1/
Now that current price is different form further theoretical price , I think C is indeed a potential correct choice. If people had loaded up cigarette the year before the tax was imposed, it is very reasonable to assume that when the tax was imposed, the volumes of cigarette sales decreased just because the stack of cigarette was not depleted rather than because the after-tax price were prohibitive.

I don't think C is wrong because" if A, then B" reasoning. The reason is in my NO.2 question. Need your justification.

Now, the only reason I find why C is wrong is this sentence:In contrast, in the year prior to the tax increase, sales had fallen one percent.

It has already ruled out the possibility that people loaded up cigarette by the impending price increase. C rules out a possible competing scenario that the stimulus has already done. Thus, C does not relatively strengthen the argument.

2/ What is your opinion about my reasoning as follows?
Am I correct?

anything disrupting the CAUSAL relationship between cigarette tax and cigarette consumption --> i.e., any ALTERNATIVE EXPLANATION FOR WHY THE TWO ARE CORRELATED --> will ruin the argument.
therefore, you can STRENGTHEN the argument by DISPENSING with such explanations.

this doesn't work. in general, the statements "if X happens, then Y will happen" and "if X doesn't happen, then Y won't happen" are unrelated to each other.

According to what you said, this question is a correlation to causation problem, and this kind reasoning assumes A is the only causal factor of B. If the choice can rule out any competing causal factor, it strengthens the argument.

IMO,the rule that the validity of "if A, then B" has nothing to do with the validity of "if not A, then not B" may not be applicable here. Because "if A, then B" reasoning does not require that A is the only causal factor of B.

[RonPurewal]

Yeah. I somehow misread the argument last time -- I didn't notice that the sales decreased in both years cited. That rules out the idea of "loading up on cigarettes".

So, yes.

[soulwangh]

Yeah. I somehow misread the argument last time -- I didn't notice that the sales decreased in both years cited. That rules out the idea of "loading up on cigarettes".

So, yes.

Thanks for confirming!!

[RonPurewal]

Sure.

[benjamindian]

This is cause and effect reasoning.

cause (X) - the tax imposed
effect (y) - reduce in cigarette sales.

X --> Y

To strengthen, you have to eliminate alternate causes that can lead to Y.
This is done by B, which states that increased awareness did not lead to reduced sales.

this is an absolutely classic type of problem: it CONFLATES CORRELATION WITH CAUSATION.

it takes a statistical correlation between cigarette tax and cigarette consumption, and postulates that one has a CAUSAL effect on the other. (here, the tax is taken to lead to decreased consumption.)

anything disrupting the CAUSAL relationship between cigarette tax and cigarette consumption --> i.e., any ALTERNATIVE EXPLANATION FOR WHY THE TWO ARE CORRELATED --> will ruin the argument.
therefore, you can STRENGTHEN the argument by DISPENSING with such explanations.

this is what choice (b) does. one possible alternative explanation is that consumers may have become more educated about the dangers of cigarettes, leading them to smoke fewer cigarettes regardless of the tax. this choice eliminates that possibility.

in general, STATEMENTS OF CAUSE AND EFFECT are stronger if OTHER VARIABLES ARE "CONTROLLED" -- i.e., if NO other variables, apart from the variables under control, are allowed to change.
choice (b) keeps one such variable (the amount of information available to consumers) controlled.

Hi Ron,

Following the same logic, I feel C could work because it ruled out another variable: awareness of future tax increase.

If in the first year customers had been aware of the coming tax increase, they would have purchased more. And that could explain the deeper drop in sales in the second year.

For instance, assuming that the general declining trend of sales was -5%;
in the first year, assuming that people were aware of the coming increase in tax, they would purchase more --> sales only declined 1% vs. normal trend of -5%;
since they had stocked up the cigarettes in the first year, the sales in the second year dropped 10% vs. normal trend of -5%.

In the scenario above, it's the awareness of the future increase in tax, instead of the actual after-tax price, that led to the steeper sales drop in the second year. Now, choice C ruled out that option since customers were unaware of the future tax increase, thus strengthening the argument that the after-tax price was probably the actual reason.

I feel there must be something wrong with my understanding about C. Did I make too much assumption or did I miss something? Thanks!

[RonPurewal]

in that hypothetical situation--in which the consumers are aware of the tax--those consumers are still reacting to the price.

[RonPurewal]

also, note that "after-tax price" does not mean "price after the increase in tax". it just means "current price plus current taxes". perhaps that's the problem here.

if they were talking about the price after the increase, the words would have to say that.

[CrystalSpringston]

This is cause and effect reasoning.

cause (X) - the tax imposed
effect (y) - reduce in cigarette sales.

X --> Y

To strengthen, you have to eliminate alternate causes that can lead to Y.
This is done by B, which states that increased awareness did not lead to reduced sales.

this is an absolutely classic type of problem: it CONFLATES CORRELATION WITH CAUSATION.

it takes a statistical correlation between cigarette tax and cigarette consumption, and postulates that one has a CAUSAL effect on the other. (here, the tax is taken to lead to decreased consumption.)

anything disrupting the CAUSAL relationship between cigarette tax and cigarette consumption --> i.e., any ALTERNATIVE EXPLANATION FOR WHY THE TWO ARE CORRELATED --> will ruin the argument.
therefore, you can STRENGTHEN the argument by DISPENSING with such explanations.

this is what choice (b) does. one possible alternative explanation is that consumers may have become more educated about the dangers of cigarettes, leading them to smoke fewer cigarettes regardless of the tax. this choice eliminates that possibility.

in general, STATEMENTS OF CAUSE AND EFFECT are stronger if OTHER VARIABLES ARE "CONTROLLED" -- i.e., if NO other variables, apart from the variables under control, are allowed to change.
choice (b) keeps one such variable (the amount of information available to consumers) controlled.

Hi Ron,
But b) has controled only one variable. What if there are other variables that can affect the sales of cigarettes.?

[RonPurewal]

your job is not to PROVE anything. you only have to STRENGTHEN the argument.
thus, "what if there are other problems?" is a non-issue.