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  5. GMAT SECTION 3: VERBAL ABILITY

GMAT GMAT SECTION 3: VERBAL ABILITY Exam
GMAT Section 3: Verbal Ability (Page 3 )

Updated On: 30-Jan-2026
Page 3 of 153
PDF with 747 Questions

In Argonia the average rate drivers pay for car accident insurance is regulated to allow insurance companies to make a reasonable profit. Under the regulations, the rate any individual driver pays never depends on the actual distance driven by that driver each year. Therefore, Argonians who drive less than average partially subsidize the insurance of those who drive more than average.
The conclusion above would be properly drawn if it were also true that in Argonia

  1. the average accident insurance rate for all drivers rises whenever a substantial number of new drivers buy insurance
  2. the average cost to insurance companies of insuring drivers who drive less than the annual average is less than the average cost of insuring drivers who drive more than the annual average
  3. the lower the age of a driver, the higher the insurance rate paid by that driver
  4. insurance company profits would rise substantially if drivers were classified in terms of the actual number of miles they drive each year
  5. drivers who have caused insurance companies to pay costly claims generally pay insurance rates that are equal to or lower than those paid by other drivers

Answer(s): B



In the 1970’s there was an oversupply of college graduates. The oversupply caused the average annual income of college graduates to fall to a level only 18 percent greater than that of workers with only high school diplomas. By the late 1980’s the average annual income of college graduates was 43 percent higher than that of workers with only high school diplomas, even though between the 1970’s and the late 1980’s the supply of college graduates did not decrease.
Which of the following, if true, in the late 1980’s, best reconciles the apparent discrepancy described above?

  1. The economy slowed, thus creating a decreased demand for college graduates.
  2. The quality of high school education improved.
  3. Compared to the 1970’s, a greater number of high schools offered vocational guidance programs for their students.
  4. The proportion of the population with at least a college-level education increased.
  5. There was for the first time in 20 years an oversupply of job seekers with only high school diplomas.

Answer(s): E



Working shorter workweeks causes managers to feel less stress than does working longer workweeks. In addition, greater perceived control over one’s work life reduces stress levels. It can be concluded, therefore, that shorter workweeks cause managers to feel they have more control over their work life.
The argument made above uses which of the following questionable techniques?

  1. Associating two conditions as cause and effect on the basis of their being causally associated with the same phenomenon
  2. Taking for granted that two factors that have a certain effect individually produce that effect more strongly when both act together
  3. Assuming what it sets out to prove
  4. Using an irrelevant point in order to draw a conclusion
  5. Basing a conclusion on preconceived views about the needs of managers

Answer(s): A



There are fundamentally two possible changes in an economy that will each cause inflation unless other compensating changes also occur. These changes are either reductions in the supply of goods and services or increases in demand. In a prebanking economy the quantity of money available, and hence the level of demand, is equivalent to the quantity of gold available.
If the statements above are true, then it is also true that in a prebanking economy

  1. any inflation is the result of reductions in the supply of goods and services
  2. if other factors in the economy are unchanged, increasing the quantity of gold available will lead to inflation
  3. if there is a reduction in the quantity of gold available, then, other things being equal, inflation must result
  4. the quantity of goods and services purchasable by a given amount of gold is constant
  5. whatever changes in demand occur, there will be compensating changes in the supply of goods and services

Answer(s): B



Industrialists from the country Distopia were accused of promoting the Distopian intervention in the Arcadian civil war merely to insure that the industrialists’ facilities in Arcadia made substantial profits during the war. Yet this cannot be the motive since, as the Distopians foresaw, Distopia’s federal expenses for the intervention were eight billion dollars, whereas, during the war, profits from the Distopian industrialists’ facilities in Arcadia totaled only four billion dollars.
Which of the following, if true, exposes a serious flaw in the argument made in the second sentence above?

  1. During the Arcadian war, many Distopian industrialists with facilities located in Arcadia experienced a significant rise in productivity in their facilities located in Distopia.
  2. The largest proportion of Distopia’s federal expenses is borne by those who receive no significant industrial profits.
  3. Most Distopian industrialists’ facilities located in Arcadia are expected to maintain the level of profits they achieved during the war.
  4. Distopian industrialists’ facilities in Arcadia made substantial profits before the events that triggered the civil war.
  5. Many Distopians expressed concern over the suffering that Arcadians underwent during the civil war.

Answer(s): B



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