Mansour: We should both plan to change some of our investments from coal companies to less polluting energy companies. And...

GMAT Critical Reasoning : (CR) Questions

Source: Official Guide

Critical Reasoning

Misc.

HARD

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Notes

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Mansour: We should both plan to change some of our investments from coal companies to less polluting energy companies. And here's why. Consumers are increasingly demanding nonpolluting energy, and energy companies are increasingly supplying it.

Therese: I'm not sure we should do what you suggest. As demand for nonpolluting energy increases relative to supply, its price will increase, and then the more polluting energy will cost relatively less. Demand for the cheaper, dirtier energy forms will then increase, as will the stock values of the companies that produce them.

Therese responds to Mansour's proposal by doing which of the following?

Advocating that consumers use less expensive forms of energy

Implying that not all uses of coal for energy are necessarily polluting

Disagreeing with Mansour's claim that consumers are increasingly demanding nonpolluting energy

Suggesting that leaving their existing energy investments unchanged could be the better course

Providing a reason to doubt Mansour's assumption that supply of nonpolluting energy will increase in line with demand

Solution

Passage Analysis:

Text from Passage	Analysis
We should both plan to change some of our investments from coal companies to less polluting energy companies.	What it says: Mansour suggests they should switch investments from coal to cleaner energy companies What it does: Sets up the main proposal that will be discussed What it is: Mansour's investment recommendation
Consumers are increasingly demanding nonpolluting energy, and energy companies are increasingly supplying it.	What it says: Both demand and supply for clean energy are growing What it does: Provides the reasoning behind Mansour's investment advice What it is: Mansour's market observation Visualization: Clean Energy Market: Demand ↑ 40% and Supply ↑ 35%
I'm not sure we should do what you suggest.	What it says: Therese disagrees with Mansour's investment plan What it does: Introduces opposition to Mansour's proposal What it is: Therese's disagreement
As demand for nonpolluting energy increases relative to supply, its price will increase, and then the more polluting energy will cost relatively less.	What it says: When clean energy demand outpaces supply, clean energy gets expensive while dirty energy becomes relatively cheaper What it does: Explains the economic mechanism behind Therese's disagreement What it is: Therese's economic reasoning Visualization: Clean Energy: $100 → $150, Dirty Energy: $80 → still $80 (relatively cheaper)
Demand for the cheaper, dirtier energy forms will then increase, as will the stock values of the companies that produce them.	What it says: Cheaper dirty energy will see increased demand and higher stock prices for those companies What it does: Completes Therese's counterargument by showing why coal investments might actually become more valuable What it is: Therese's prediction about market consequences Visualization: Coal Company Stocks: $50 → $75 as demand shifts back to cheaper dirty energy

Argument Flow:

Mansour makes a straightforward investment recommendation based on growing clean energy trends. Therese responds by accepting Mansour's premise about increasing clean energy demand but then traces through the economic consequences to reach the opposite conclusion.

Main Conclusion:

Therese concludes they shouldn't switch investments because economic forces will eventually make dirty energy more attractive again, boosting coal company stocks.

Logical Structure:

Therese uses economic cause-and-effect reasoning: she agrees that clean energy demand is growing, but argues this will create a price imbalance that ultimately benefits dirty energy companies, making Mansour's investment switch counterproductive.

Prethinking:

Question type:

Misc - This is asking us to identify what Therese is doing in her response to Mansour's proposal. We need to understand her method of reasoning or argumentative strategy.

Precision of Claims

The claims involve market dynamics - demand/supply relationships, price effects, and investment outcomes. Mansour claims both demand and supply are increasing for clean energy. Therese focuses on the relative rates of increase and subsequent price effects.

Strategy

Since this is a Misc question asking what Therese does in her response, we need to analyze her argumentative approach. She's not just disagreeing - she's using a specific method. Let's look at how she responds: She takes Mansour's premise (increasing demand for clean energy) and shows how it could lead to the opposite conclusion through economic reasoning about relative prices and market dynamics.

Answer Choices Explained

Advocating that consumers use less expensive forms of energy

This mischaracterizes Therese's argument. She's not advocating that consumers should use less expensive energy forms. Instead, she's predicting that consumers will naturally gravitate toward cheaper energy when clean energy becomes more expensive. She's describing market behavior, not advocating for consumer choices.

Implying that not all uses of coal for energy are necessarily polluting

Therese never suggests that coal use isn't necessarily polluting. She accepts the premise about pollution levels and focuses entirely on economic dynamics rather than questioning the environmental impact of different energy sources.

Disagreeing with Mansour's claim that consumers are increasingly demanding nonpolluting energy

This is incorrect because Therese actually accepts Mansour's claim about increasing consumer demand for clean energy. Her entire argument is built on this premise - she uses it as the starting point for her economic reasoning about price effects.

Suggesting that leaving their existing energy investments unchanged could be the better course

This correctly identifies what Therese is doing. She starts by saying 'I'm not sure we should do what you suggest' and then provides economic reasoning that leads to the conclusion that their current coal investments might actually become more valuable. She's suggesting that not making the investment switch could be the better strategy.

Providing a reason to doubt Mansour's assumption that supply of nonpolluting energy will increase in line with demand

Therese doesn't question whether supply will increase - she accepts that both demand and supply are increasing. Her focus is on the relative rates of increase (demand outpacing supply) and the resulting price dynamics, not doubting that supply will increase.

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