In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

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In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent. In contrast, in the year prior to the tax increase, sales had fallen one percent. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.

Which of the following, if true, would most strengthen the argument above?

During the second year after the tax increase, cigarette sales increased by a significant amount.

The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.

Most consumers were unaware that the tax on cigarettes was going to increase.

During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.

During the year after the tax increase, there was a greater variety of cigarettes on the market than there had been during the previous year.

Solution

Passage Analysis:

Text from Passage	Analysis
In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent.	What it says: After the tax went up by 8 cents, cigarette sales dropped 10% What it does: Gives us the first data point showing what happened when taxes increased What it is: Study finding/statistical evidence Visualization: Tax increase: $\$0.08$ → Sales drop: 10%
In contrast, in the year prior to the tax increase, sales had fallen one percent.	What it says: Before the tax increase, sales only dropped 1% What it does: Creates a comparison that highlights the much bigger drop after the tax increase What it is: Contrasting statistical evidence Visualization: Year before tax: Sales ↓ 1% Year after tax: Sales ↓ 10%
The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.	What it says: Sales volume and after-tax price are strongly connected What it does: Draws a conclusion from the two data points we just saw What it is: Author's main conclusion Visualization: Higher after-tax price → Much lower sales volume

Argument Flow:

The argument starts with evidence showing a big sales drop (10%) after a tax increase, then contrasts this with a much smaller drop (1%) before the tax increase. It uses this comparison to conclude there's a strong relationship between after-tax price and sales volume.

Main Conclusion:

The volume of cigarette sales is strongly related to the after-tax price of a pack of cigarettes.

Logical Structure:

The author uses a before-and-after comparison as evidence. The logic is: if sales dropped much more dramatically after the tax increase (10% vs 1%), then price changes must strongly affect sales volume. The evidence supports the conclusion through this contrast in sales patterns.

Prethinking:

Question type:

Strengthen - We need to find new information that would increase our belief in the conclusion that cigarette sales volume is strongly related to after-tax price

Precision of Claims

The argument makes quantitative claims (8-cent tax increase, 10% sales drop vs 1% drop) and a causal relationship claim (sales volume strongly related to after-tax price)

Strategy

To strengthen this argument, we need information that either eliminates alternative explanations for the sales drop or provides additional evidence that price changes cause sales changes. We should look for scenarios that rule out other factors that might have caused the 10% drop, or that show this price-sales relationship exists in other contexts too

Answer Choices Explained

During the second year after the tax increase, cigarette sales increased by a significant amount.

This actually weakens the argument rather than strengthening it. If sales bounced back significantly in the second year while the tax presumably remained high, this suggests that factors other than price might be driving sales patterns. This contradicts the conclusion that there's a strong relationship between after-tax price and sales volume.

The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.

This strengthens the argument perfectly by eliminating an alternative explanation. We need to rule out other reasons why cigarette sales might have dropped 10% after the tax increase. If health information campaigns or new warnings had been released around the same time, that could explain the sales drop instead of the price increase. By confirming that health risk information stayed constant, we can be more confident that the price increase was indeed the cause of the dramatic sales decline.

Most consumers were unaware that the tax on cigarettes was going to increase.

This doesn't strengthen the argument because whether consumers knew about the tax increase beforehand doesn't affect whether the actual price increase influenced their purchasing decisions. What matters is how they responded to the higher prices once they encountered them, not their advance knowledge.

During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.

This weakens the argument by providing an alternative explanation for the sales drop. If people had less disposable income, they might have reduced cigarette purchases due to general budget constraints rather than specifically responding to the higher after-tax price of cigarettes. This makes the price-sales relationship less convincing.

During the year after the tax increase, there was a greater variety of cigarettes on the market than there had been during the previous year.

This doesn't clearly strengthen or weaken the argument, but if anything, it might slightly weaken it. More variety typically leads to increased sales, not decreased sales. So having more options available while still seeing a 10% drop doesn't help establish that price was the driving factor.

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