Recently in City X, developers have stopped buying land, contractors have found themselves going without work for longer periods, and banks have issued fewer mortgages. There must be fewer new residents moving to City X than there were previously.
Which of the following indicates a flaw in the reasoning above?
A. This year several housing blocks have gone on the market after being held up for months by legal red tape.
B. The average size of a new home has increased significantly over the past several years.
C. Re-sales of condominiums have increased over the past six months.
D. The cost of materials such as lumber and cement has decreased over the past year.
E. Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.
The correct answer is A, but the explanation makes no sense. The answer explanation (see below) says this is the case becaue "there might be another reason for the decline in home construction". However, mortgages are used by people purchasing both NEW and EXISTING homes, so if people are buying houses in those housing blocks, people would still need mortgages. So no answer could be right. However, if we ignore the mortage part, A could be right.
If you ignore the mortgage part, C could be right as well. Developers and contractors are building new homes because new residents are moving into existing condos, while current residents are moving out. However, the answer explanation for why C is wrong states "The argument centers on new homes, so re-sales of condominiums are not directly related." But this is incorrect. The argument centers on NEW RESIDENTS, not new homes.
Below is the entire explanation. Comments would be greatly appreciated.
The conclusion of the argument is that "there must be fewer new residents moving to City X than there were previously." Why? Because of several observed factors (e.g., developers not buying land, contractors without work, banks issuing fewer mortgages) that the author assumes result from the fewer people trying to buy new homes. We are asked to find a flaw in the reasoning of this argument.
(A) CORRECT. This suggests that there might be another reason for the decline in home construction: the supply of available housing has been increased through the release of many previously built homes. Therefore, the reasoning in the argument is flawed.
(B) The size of homes, by itself, does not point to any flaw in the argument.
(C) The argument centers on new homes, so re-sales of condominiums are not directly related.
(D) If materials cost less, it seems more likely that any decrease in new home construction could be attributed to the stated causes.
GMAT Forum
6 postsPage 1 of 1
- Hanumayamma
Argument: City X: developers are stop buying lands, builders are going out of work for long time and fewer mortgages. Seems economy is not doing well in the city.
If the answer choices introduce fact that other than bad economy factors then it would be correct one to show flawed reasoning.
A. This year several housing blocks have gone on the market after being held up for months by legal red tape. [Hold it]
B. The average size of a new home has increased significantly over the past several years. [Size not discussed - Eliminate it]
C. Re-sales of condominiums have increased over the past six months. [Condominiums not discussed - eliminate it]
D. The cost of materials such as lumber and cement has decreased over the past year. [ Lumber not discussed - eliminate it]
E. Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year. [Other big item tickets out side the scope - eliminate it]
Answer: A
If the answer choices introduce fact that other than bad economy factors then it would be correct one to show flawed reasoning.
A. This year several housing blocks have gone on the market after being held up for months by legal red tape. [Hold it]
B. The average size of a new home has increased significantly over the past several years. [Size not discussed - Eliminate it]
C. Re-sales of condominiums have increased over the past six months. [Condominiums not discussed - eliminate it]
D. The cost of materials such as lumber and cement has decreased over the past year. [ Lumber not discussed - eliminate it]
E. Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year. [Other big item tickets out side the scope - eliminate it]
Answer: A
- DaveGill
Among A and C, Even I think choice C is better.
A- A set of already developed house has come on the market. We don't know if they are selling well. We can't say new new residents are moving into the market.
C - resale of condos have increased. Definitely new people are moving into the City.
Stacy/Ron - Please assist.
A- A set of already developed house has come on the market. We don't know if they are selling well. We can't say new new residents are moving into the market.
C - resale of condos have increased. Definitely new people are moving into the City.
Stacy/Ron - Please assist.
- RonPurewal
- Students
- Posts: 19744
- Joined: Tue Aug 14, 2007 8:23 am
DaveGill Wrote:Among A and C, Even I think choice C is better.
A- A set of already developed house has come on the market. We don't know if they are selling well. We can't say new new residents are moving into the market.
C - resale of condos have increased. Definitely new people are moving into the City.
Stacy/Ron - Please assist.
hey - see if this helps
http://www.manhattangmat.com/forums/cit ... t2132.html
if your question isn't answered in that thread, go ahead and post back. thanks
6 posts Page 1 of 1