GMAT
A prominent investor who holds a large stake in the Burton Tool Company has recently claimed that the company is mismanaged. As evidence for this claim, the investor cited the company's failure to slow production in response to a recent rise in its inventory of finished products. It is doubtful whether an investor's sniping at management can ever be anything other than counterproductive, but in this case it is clearly not justified. It is true that an increased inventory of finished products often indicates that production is outstripping demand. In Burton's case it indicates no such thing, however: the increase in inventory is entirely attributable to products that have already been assigned to orders received from customers. In the argument given, the two boldfaced portions play which of the following roles?
Certainly, pesticides can adversely affect the environment in localities distant from where the pesticide has actually been used. Nevertheless, regulation of pesticide use should not take place at the national level but at the local level. It is in the areas where pesticides are actually applied that they have their most serious effects. Just how serious these effects are depends on local conditions such as climate, soil type, and water supply. And local officials are much more likely than national legislators to be truly knowledgeable about such local conditions.In the argument given, the two boldface portions play which of the following roles?
Environmental organizations want to preserve the land surrounding the Wilgrinn Wilderness Area from residential development. They plan to do this by purchasing that land from the farmers who own it. That plan is ill-conceived: if the farmers did sell their land, they would sell it to the highest bidder, and developers would outbid any other bidders. On the other hand, these farmers will never actually sell any of the land, provided that farming it remains viable. But farming will not remain viable if the farms are left unmodernized, and most of the farmers lack the financial resources modernization requires. And that is exactly why a more sensible preservation strategy would be to the farmers to modernize their farms to the extent needed to maintain viability.In the reasoning above, the two boldface portions play which of the following roles?
A product that represents a clear technological advance over competing products can generally command a high price. Surprisingly, perhaps, the strategy to maximize overall profit from a new product is to charge less than the greatest price the market will bear. Many companies charge the maximum possible price for such a product, because they want to make as much profit as they can and technological advances tend to be quickly surpassed. The drawback is that large profits on the new product give competitors a strong incentive to quickly match the new product's capabilities.In the argument above, the two portions in boldface play which of the following roles?
Plant scientists have used genetic engineering on seeds to produce crop plants that are highly resistant to insect damage. Unfortunately, the plants require more fertilizer and water togrow well than normal ones do, and the seeds themselves are quite expensive, and for most farmers the savings on pesticides would not compensate for the higher seed costs and the cost of additional fertilizer. However, since consumer demand for grains, fruits, and vegetables grown without the use of pesticides continues to rise, the use of genetically engineered seeds of this kind is likely to become widespread.In the argument given, the two portions in boldface play which of the following roles?