Logical reasoning PrepTest 135 · Section 2 · Question 22

Incorrect. The belief of Economists is stated as a general belief about "any product," so how they study a subset of products is out of scope. Additionally, in trying to suggest that the Economists' data shouldn't apply in this situation, this answer falls into the "one of the views is wrong about this subject" camp, a common trap answer.

Incorrect. The Merchants don't need to understand economics to know the actual impact a change in price had on their sales—they just need the receipts.

Incorrect. There's no indication which wine is superior, and this stimulus is about buying one wine over another, not forgoing other items.

Incorrect. This answer doesn't address domestic wine sales at all. If anything, this answer suggests that people should be buying domestic wines since they're comparable in quality to imported wines that cost more!

Correct. Argument or Facts:
Facts

Question Type:
Paradox

Stimulus Summary:
Economists: Reducing the price of an item stimulates demand for itWine merchants: Reducing the price of domestic wines increases the sales of imported wines

Answer Anticipation:
We're tasked with reconciling the belief of the economists with the experience of the wine merchants, so we need to find a way to make them both true. That requires starting by figuring out why they're in conflict to begin with.

The Economists claim that reducing the price of an item stimulates demand for that good. The Wine Merchants, on the other hand, saw sales of a competing good go up when they lowered the price of domestic wine.

But wait a second—there's no conflict there. The Economists didn't claim that lowering the price of a good affects only that good—they said that lowering the price for a good increases demand for it. There's no information about the sales of domestic wines after the price drop. It's quite possible that lowering the price of domestic wines increased sales of all wines—both imported and domestic—and thus there's no conflict here.

If this were an argument-based question, we'd say that the "rebuttal" (the Wine Merchants) didn't address the point made by the Economists in failing to discuss domestic wine sales. Since this is a Paradox question, we can look for an answer that brings up domestic wine sales increasing being possible even with imported wine sales increasing, thus allowing the Economists' view to hold.

Answer Explanation:
This answer highlights that sales of both domestic and imported wines could have increased in response to the domestic wine sale. If that's the case, then the Economists's relationship holds.

Key Takeaway:
When there are two viewpoints in a Paradox question, see if the stances they have that are meant to be reconciled address the same point. If they don't, then highlighting how the different points are compatible will likely be the correct answer.