Keith: Compliance with new government regulations requiring the installation of smoke alarms and sprinkler systems in all theaters and arenas...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

Misc.

MEDIUM

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Notes

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Keith: Compliance with new government regulations requiring the installation of smoke alarms and sprinkler systems in all theaters and arenas will cost the entertainment industry $25 billion annually. Consequently, jobs will be lost and profits diminished. Therefore, these regulations will harm the country's economy.

Laura: The $25 billion spent by some businesses will be revenue for others. Jobs and profits will be gained as well as lost.

Laura responds to Keith by

demonstrating that Keith's conclusion is based on evidence that is not relevant to the issue at hand

challenging the plausibility of the evidence that serves as the basis for Keith's argument

suggesting that Keith's argument overlooks a mitigating consequence

reinforcing Keith's conclusion by supplying a complementary interpretation of the evidence Keith cites

agreeing with the main conclusion of Keith's argument but constructing that conclusion as grounds for optimism rather than for pessimism

Solution

Passage Analysis:

Text from Passage	Analysis
Keith: Compliance with new government regulations requiring the installation of smoke alarms and sprinkler systems in all theaters and arenas will cost the entertainment industry $25 billion annually.	What it says: New regulations will cost the entertainment industry $25 billion per year What it does: Sets up the financial impact that Keith's argument will be based on What it is: Keith's premise about regulatory costs Visualization: Entertainment Industry Budget: $25 billion going out as compliance costs
Consequently, jobs will be lost and profits diminished.	What it says: The $25 billion cost will lead to job losses and lower profits What it does: Connects the financial burden to negative economic effects What it is: Keith's prediction of consequences Visualization: $25 billion cost → Fewer jobs + Lower profits
Therefore, these regulations will harm the country's economy.	What it says: The regulations will damage the overall national economy What it does: Takes the job losses and profit drops and extends them to hurt the whole country What it is: Keith's main conclusion Visualization: Entertainment losses → National economic harm
Laura: The $25 billion spent by some businesses will be revenue for others.	What it says: The money entertainment companies spend will become income for other businesses What it does: Challenges Keith's view by showing the money doesn't disappear from the economy What it is: Laura's counter-premise Visualization: Entertainment pays $25 billion → Safety equipment companies receive $25 billion
Jobs and profits will be gained as well as lost.	What it says: While some jobs/profits disappear, others will be created What it does: Directly contradicts Keith's focus on only the negative side What it is: Laura's balancing perspective

Argument Flow:

Keith presents a straightforward chain: regulations cost money → entertainment industry loses jobs/profits → national economy suffers. Laura responds by pointing out that Keith only looked at one side of the equation - she shows that the same $25 billion creates opportunities elsewhere, making the net economic impact unclear.

Main Conclusion:

Keith concludes the regulations will harm the country's economy, while Laura doesn't state a conclusion but implies the economic impact could be neutral or even positive.

Logical Structure:

Keith uses a simple cause-and-effect chain, but Laura reveals a flaw in his reasoning - he ignored that money spent by one industry becomes revenue for another. Laura shows Keith's analysis is incomplete because he only counted costs without counting corresponding benefits.

Prethinking:

Question type:

Misc - This is asking us to identify how Laura responds to Keith's argument. We need to describe the logical technique or method Laura uses in her counterargument.

Precision of Claims

Keith makes a specific quantitative claim ($25 billion cost) and qualitative claims (jobs lost, profits diminished, economy harmed). Laura accepts the quantitative fact but reframes the qualitative impact by showing the other side of the economic equation.

Strategy

For this misc question asking how Laura responds, we need to identify the logical technique she uses. Laura doesn't deny Keith's facts but shows he's only looking at one side of the story. She points out that the $25 billion doesn't vanish - it becomes revenue for other businesses. This is a classic 'showing the other side of the coin' or 'providing a more complete picture' response. We should look for options that capture this reframing technique.

Answer Choices Explained

demonstrating that Keith's conclusion is based on evidence that is not relevant to the issue at hand

This suggests Laura shows Keith's evidence isn't relevant to whether regulations harm the economy. But Laura doesn't say the $25 billion cost is irrelevant - she accepts this evidence and works with it. She's not questioning the relevance of Keith's evidence, just showing he's missing part of the picture.

challenging the plausibility of the evidence that serves as the basis for Keith's argument

This would mean Laura questions whether the $25 billion figure or resulting job losses are plausible. But Laura never challenges the believability of Keith's evidence. She accepts that the entertainment industry will indeed spend $25 billion and may lose jobs/profits.

suggesting that Keith's argument overlooks a mitigating consequence

This perfectly captures what Laura does. Keith's argument focuses only on the harm to the entertainment industry, but Laura points out he's overlooking a mitigating factor - the same money creates revenue and jobs elsewhere. A mitigating consequence is something that reduces or counteracts the negative effects Keith predicts. Laura shows the economic impact may be less severe (or non-existent) because Keith only counted costs without counting corresponding benefits.

reinforcing Keith's conclusion by supplying a complementary interpretation of the evidence Keith cites

This would mean Laura supports Keith's conclusion while adding complementary evidence. But Laura doesn't reinforce Keith's conclusion that the economy will be harmed - she actually undermines it by showing the analysis is incomplete.

agreeing with the main conclusion of Keith's argument but constructing that conclusion as grounds for optimism rather than for pessimism

This suggests Laura agrees the regulations will harm the economy but sees this harm as positive. But Laura doesn't agree with Keith's conclusion at all - she implies the net economic effect might be neutral or even positive, not that economic harm is good news.

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