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  5. GMAT SECTION 3: VERBAL ABILITY

Free GMAT SECTION 3: VERBAL ABILITY Exam Braindumps (page: 34)

Page 33 of 190
PDF with 747 Questions

In an attempt to discourage the widespread acceptance of clothing manufactured in sweatshops, the council of a small town plans to ban the sale of sweatshop goods for which substitutes manufactured under humane conditions exist. The council argues that non-sweatshop apparel is morally preferable.
Which of the following, if true, indicates that the plan to ban the sale of sweatshop goods is ill suited to the town council's moral objectives?

  1. Although clothing manufactured in sweatshops is now available, members of the town council believe non- sweatshop apparel is better for workers in the clothing manufacturing business.
  2. The clothing factory at which most of the townspeople are employed plans to improve their working conditions.
  3. After other towns enacted similar bans on the sale of clothing manufactured in sweatshops, the benefits to workers in the clothing manufacturing business were not discernible for several years.
  4. Since most townspeople prefer clothing manufactured in sweatshops in many instances, they are likely to purchase them in neighboring towns where such goods are available for sale.
  5. Sweatshops sometimes produce items other than apparel.

Answer(s): D

Explanation:

The best answer is D. If the town’s residents are likely to purchase the same items from another town, then the town council's objectives of limiting purchases of sweatshop manufactured clothing will not be met.



Holden’s Ltd. two subsidiaries performed with remarkable consistency over the past five years: in each of those years, Lexton has accounted for roughly 30 percent of dollar sales and 60 percent of profits, and Still more for the balance.
Which of the following can properly be inferred regarding the past five years from the statement above?

  1. Total dollar sales for each of the subsidiaries have remained roughly constant.
  2. Lexton has faced stiffer competition in its markets than hasStill more.
  3. Still more has realized lower profits per dollar of sales than has Lexton.
  4. The product mix offered by each of the company's divisions has remained unchanged.
  5. Highly profitable products accounted for a higher percentage of Stillmore's sales than of those of Lexton.

Answer(s): C

Explanation:

The best answer is C. If Lexton has accounted for roughly 30 percent of dollar sales and 60 percent of profits, then it has realized more profit per dollar of sales than Stillmore. There are not enough facts to support the inferences reached in the other answers.



Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.
Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

  1. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.
  2. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.
  3. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.
  4. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.
  5. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.

Answer(s): D

Explanation:

The best answer is D. According to choice D, the promotion does not bring about increased sales to the consumer, but a hoarding of the product by the retailer. Without the promotion, retailers would eventually buy the same numbers of the product at its full price, therefore, choice D supports the claim.



New home buyers are all financially protected against bankruptcy of the contractor because of a law requiring the contractor to get bank backing to insure all individual investments. An economist argues that this insurance is partly responsible for the high rate of bankruptcies among contractors, since it removes from buyers any financial incentive to find out the financial status of the contractor they are hiring. If buyers were more selective, then contractors would need to be secure in order to compete for buyers.
The economist's argument makes which of the following assumptions?

  1. Bankruptcy is caused when contractors default on loan repayments to their banks.
  2. A significant proportion of contractors use the services of sub-contractors to do the bulk of the work.
  3. The more a homebuyer has to invest in a house he or she is building, the more careful he or she tends to be in selecting a contractor.
  4. The difference in the payment schedules to contractors is not a significant factor in bankruptcies.
  5. People looking for a contractor to build their houses are able to determine which contractors are secure against bankruptcy.

Answer(s): E

Explanation:

The best answer is E. The economist’s assumption is that what he is proposing can be implemented. If those people looking for a contractor are unable to determine which ones are secure against bankruptcy, then buyers do not have the option of being more selective in their choice of contractor.






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