In the 1970's there was an oversupply of college graduates. The oversupply caused the average annual income of college graduates...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

Paradox

MEDIUM

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Notes

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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?

The economy slowed, thus creating a decreased demand for college graduates.

The quality of high school education improved.

Compared to the 1970's, a greater number of high schools offered vocational guidance programs for their students.

The proportion of the population with at least a college-level education increased.

There was for the first time in 20 years an oversupply of job seekers with only high school diplomas.

Solution

Passage Analysis:

Text from Passage	Analysis
In the 1970's there was an oversupply of college graduates.	What it says: Too many college graduates existed in the 1970s compared to available jobs What it does: Sets up the initial situation and explains why income gaps were small What it is: Author's factual claim about market conditions Visualization: 1970s: 100 college grads competing for 60 good jobs = oversupply
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.	What it says: College grads earned just 18% more than high school grads because of too much supply What it does: Shows the direct result of oversupply - very small income advantage for college What it is: Author's explanation of cause-and-effect relationship Visualization: 1970s: High school grad = $30,000, College grad = $35,400 (only 18% more)
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.	What it says: By late 1980s, college grads earned 43% more than high school grads, but supply stayed the same What it does: Creates a puzzle - income gap widened despite supply not decreasing What it is: Author's presentation of contradictory evidence Visualization: Late 1980s: High school grad = $30,000, College grad = $42,900 (43% more), but still 100 college grads available

Argument Flow:

The passage presents a timeline puzzle. We start with 1970s oversupply causing small income gaps, then jump to late 1980s showing much larger income gaps. The twist is that college graduate supply didn't decrease, which normally would mean the gap should stay small or get even smaller.

Main Conclusion:

There's no explicit conclusion - this is a paradox that needs explanation. The passage sets up a contradiction between what we'd expect (continued small income gaps) and what actually happened (much larger income gaps).

Logical Structure:

This isn't a traditional argument with premises supporting a conclusion. Instead, it's a 'resolve the paradox' setup where we have two facts that seem to contradict each other: (1) college graduate supply didn't decrease, but (2) their income advantage dramatically increased. The question asks us to find what explains this apparent contradiction.

Prethinking:

Question type:

Paradox - We need to explain how college graduates' income advantage grew from 18% to 43% even though their supply didn't decrease. This seems contradictory because normally when supply stays high, wages shouldn't improve dramatically.

Precision of Claims

The key claims are quantitative (18% vs 43% income differences, supply levels) and temporal (1970s vs late 1980s). We cannot question these specific numbers or timeframes, but we can explain what changed in the market dynamics.

Strategy

For paradox questions, we need to find what changed between the 1970s and late 1980s that would allow college graduates to earn much more relative to high school graduates, even though college graduate supply stayed constant. We should look for factors that either increased demand for college graduates or decreased the relative position of high school graduates.

Answer Choices Explained

The economy slowed, thus creating a decreased demand for college graduates.

This actually makes the paradox worse rather than resolving it. If demand for college graduates decreased while their supply stayed the same, we'd expect their income advantage to shrink, not grow from 18% to 43%. This choice moves us in the wrong direction entirely.

The quality of high school education improved.

This doesn't help resolve the paradox either. If high school education quality improved, we'd expect high school graduates to become more competitive with college graduates, which should narrow the income gap, not widen it from 18% to 43%. This contradicts what we observe.

Compared to the 1970's, a greater number of high schools offered vocational guidance programs for their students.

Similar to Choice B, better vocational guidance would likely make high school graduates more competitive and better at finding good jobs. This should reduce the income gap, not increase it dramatically as described in the passage.

The proportion of the population with at least a college-level education increased.

This is telling us that college graduate supply actually did increase, which directly contradicts the passage's explicit statement that 'the supply of college graduates did not decrease.' We can't use information that contradicts the given facts.

There was for the first time in 20 years an oversupply of job seekers with only high school diplomas.

This perfectly resolves our paradox! Here's why: while college graduate supply stayed constant, high school graduate supply dramatically increased. When there's an oversupply of high school graduates, competition for jobs drives their wages down. College graduates maintain their same supply level but now have a huge advantage because employers can choose from many high school graduates (keeping those wages low) while college graduates remain at the same supply level. This creates a wider income gap - not necessarily because college graduates earned much more, but because high school graduates earned relatively less due to their oversupply situation.

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