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GMAT Verbal Critical Reasoning
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Author:  questioner [ Sat May 25, 2013 5:13 am ]
Post subject:  GMAT Verbal Critical Reasoning

Columnist: U.S. automotive companies are having a difficult time competing with car manufacturers from South Korea. U.S. manufacturers have proposed to significantly lower the wages of their employees in order to compete with Korean manufacturers because wages constitute approximately 30% of automobile production costs.

Which of the following, if true, is the strongest argument against the proposal to lower wages?";
A. Lowering wages will likely cause the best workers to leave, lowering quality of the final product, which would in turn lower sales and market share.
B. Raw materials, such as steel, constitute 25% of the cost of an automobile; their price is determined by the market and not easily influenced.
C. U.S. automakers have recently made some gains on foreign manufacturers and recaptured part of their previous market share.
D. U.S. workers’ wages are 25% higher than those of workers in South Korea.
E. U.S. auto manufacturers recently increased their spending on advertising.

(A) Because it suggests that dropping salaries will lead to lower sales, (A) is the best answer. Although raw materials may constitute a large portion of the cost of an automobile, this does not negate the benefit of lowering costs through lowering salaries, and so choice (B) is incorrect.

Choice (C), while perhaps suggesting that lowering wages may not be essential to improving competitiveness, does not represent an argument against reducing wages.

Even though choice (D) may be true, it provides no information on the potential effects of a reduction in wages.

Choice (E) is irrelevant, as it merely suggests that U.S. spending on advertising is not working very well. Choice (A) is the best answer.
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I strongly disagree the tone of the argument is strictly quantifiable events those that are in the context of the passage. Using that as a basis, the raw material would be the only viable alternative that we could concluded. Where in the passage does it show the cause and effect if it were true?

Author:  Jane [ Sat May 25, 2013 5:13 am ]
Post subject:  Re: GMAT Verbal Critical Reasoning

The proposal is about lowering wages. Raw materials is outside the scope of the argument.

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