During the past year, Pro-Tect Insurance Company's total payout on car-theft claims has been larger than the company can afford...
GMAT Critical Reasoning : (CR) Questions
Source: Official Guide
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During the past year, Pro-Tect Insurance Company's total payout on car-theft claims has been larger than the company can afford to sustain. Pro-Tect cannot reduce the number of car-theft policies it carries, so it cannot protect itself against continued large payouts that way. Therefore, Pro-Tect has decided to offer a discount to holders of car-theft policies whose cars have antitheft devices. Many policyholders will respond to the discount by installing such devices, since the amount of the discount will within two years typically more than cover the cost of installation. Thus, because cars with antitheft devices are rarely stolen, Pro-Tect's plan is likely to reduce its annual payouts.
In the argument above, the two portions in boldface play which of the following roles?
Solution
Understanding the Passage
| Text from Passage | Analysis |
|---|---|
| "During the past year, Pro-Tect Insurance Company's total payout on car-theft claims has been larger than the company can afford to sustain." |
|
| (Boldface 1) "Pro-Tect cannot reduce the number of car-theft policies it carries, so it cannot protect itself against continued large payouts that way." |
|
| "Therefore, Pro-Tect has decided to offer a discount to holders of car-theft policies whose cars have antitheft devices." |
|
| "Many policyholders will respond to the discount by installing such devices, since the amount of the discount will within two years typically more than cover the cost of installation." |
|
| (Boldface 2) "Thus, because cars with antitheft devices are rarely stolen, Pro-Tect's plan is likely to reduce its annual payouts." |
|
Overall Structure
The author is presenting a business problem and explaining how a specific solution will work. The flow is: Problem → Why obvious solution won't work → Alternative solution → Why people will adopt it → Why it will solve the problem.
Main Conclusion: Pro-Tect's plan to offer discounts for antitheft devices is likely to reduce its annual payouts.
Boldface Segments
- Boldface 1: Pro-Tect cannot reduce the number of car-theft policies it carries, so it cannot protect itself against continued large payouts that way.
- Boldface 2: Thus, because cars with antitheft devices are rarely stolen, Pro-Tect's plan is likely to reduce its annual payouts.
Boldface Understanding
Boldface 1:
- Function: This explains why Pro-Tect cannot use the most obvious solution (reducing policies) and justifies why they need an alternative approach
- Direction: Supports the author's ultimate position by eliminating alternatives and making the proposed solution necessary
Boldface 2:
- Function: This is the main conclusion of the argument, explaining why the proposed plan will succeed
- Direction: This IS the author's ultimate position - it directly states the conclusion
Structural Classification
Boldface 1:
- Structural Role: Constraint/limitation that rules out an alternative solution and supports the need for the proposed solution
- Predicted Answer Patterns: "eliminates an alternative", "constraint that supports the conclusion", "rules out an option"
Boldface 2:
- Structural Role: Main conclusion of the argument
- Predicted Answer Patterns: "main conclusion", "the conclusion the argument reaches", "what the argument concludes"
Answer Choices Explained
A
The first and the second are both evidence offered by the argument as support for its main conclusion.
'The first and the second are both evidence offered by the argument as support for its main conclusion' - ✗ WRONG - The second boldface IS the main conclusion, not evidence supporting it. The first boldface does support the conclusion, but calling both 'evidence' mischaracterizes the second's role.
B
The first presents a problem a response to which the argument assesses; the second is the judgment reached by that assessment.
'The first presents a problem a response to which the argument assesses' - ✓ CORRECT - The first boldface identifies that Pro-Tect cannot reduce policies (a constraint/problem), and the argument then assesses an alternative response (the discount plan). 'The second is the judgment reached by that assessment' - ✓ CORRECT - The second boldface concludes that the plan will likely reduce payouts, which is exactly the final judgment after assessing the proposed solution.
C
The first is the position the argument seeks to establish; the second is a judgment the argument uses to support that position.
'The first is the position the argument seeks to establish' - ✗ WRONG - The argument doesn't seek to establish that Pro-Tect cannot reduce policies; this is presented as a given constraint, not something being argued for. 'The second is a judgment the argument uses to support that position' - ✗ WRONG - The second boldface doesn't support the first; rather, it's the conclusion about a different solution entirely.
D
The first is a development that the argument seeks to explain; the second is a prediction the argument makes in support of the explanation it offers.
'The first is a development that the argument seeks to explain' - ✗ WRONG - The argument doesn't explain why Pro-Tect cannot reduce policies; it accepts this as a constraint and moves on to find alternative solutions. 'The second is a prediction the argument makes in support of the explanation it offers' - ✗ WRONG - Since the argument doesn't explain the first boldface, the second can't be supporting that non-existent explanation.
E
The first presents a development whose likely outcome is at issue in the argument; the second is a judgment the argument uses in support of its conclusion about that outcome.
'The first presents a development whose likely outcome is at issue in the argument' - ✗ WRONG - The argument isn't debating the outcome of being unable to reduce policies; it treats this constraint as settled and focuses on finding alternative solutions. 'The second is a judgment the argument uses in support of its conclusion about that outcome' - ✗ WRONG - The second boldface is the main conclusion itself, not a judgment supporting another conclusion.
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