#4 - When deciding where to locate or relocate, businesses

[Administrator]

Complete Question Explanation

Resolve the Paradox. The correct answer choice is (B).

Answer choice (A):

Answer choice (B): This is the correct answer choice.

Answer choice (C):

Answer choice (D):

Answer choice (E):

This explanation is still in progress. Please post any questions below!

[Arindom]

Hi,

I had a hard time with this question. I chose E since i wasn't happy with the other choices. In ans choice. perhaps businesses have to act on their suggestions and move out when they do not get tax reductions. Hence, they are moving out.

How does B explain the discrepancy?

Thanks.

- Arindom

[Adam Tyson]

Answer E here would be much better if it said something like "businesses are TYPICALLY ABLE to obtain tax reductions", which would make the higher tax rate less of a concern. As it is, the answer only says they sometimes TRY to get a reduction. Do they ever succeed? How often do they try?

What answer B does is help show that a negative in one category (tax rates) might be offset by a positive in another area (education or services), balancing the scales in a way that makes the negative more acceptable. That would help to explain why tax rates, although just as important as access to markets, would be less likely to impact the ultimate decision of where to locate. Think of it as averaging, and not unlike the situation many LSAT students are facing - some law schools may claim that GPA and LSAT are of equal importance in determining admissions, but a high LSAT could offset a low GPA.

Hope that helps! Good luck in your continued studies.

[andriana.caban]

Can you please explain why (D) is incorrect? And, what the flaw is in the Stimulus.

I ended up eliminating all of the answer choices through POE and couldn't figure out which one was correct so I guessed. Why would (B) resolve? Shouldn't we be finding an answer choice that shows a lack of proximity to markets and raw materials results in municipalities loosing business AND that a higher tax rate for businesses less of an affect on whether a business stays [although, they are all of equal importance to business]

Thanks!

[Jeremy Press]

Hi Andriana!

In a Resolve the Paradox question, there is not typically a "flaw" in the stimulus, if by "flaw" you mean an error in the use of logic. Rather, what such a stimulus will present is a set of facts that are seemingly inconsistent (even contradictory). Often that inconsistency will be introduced through the use of a conjunction that implies inconsistency (here, the word "although"). In this stimulus, the facts that are seemingly inconsistent are that (a) the named factors in sentence 1 have equal importance in attracting business relocation, but (b) one of those factors (lack of proximity to markets or raw materials) has a frequently negative effect on attracting businesses that another factor (having a higher-than-average business-tax rate) rarely has.

Answer choice D is incorrect because it's talking about the relative willingness of certain "members of the work force" (i.e. individual employees) to relocate, when what the stimulus wants us to explain is why businesses are more or less attracted by certain factors when choosing to relocate. Since we cannot be certain that employees' behavior mirrors businesses' behavior, there is no way answer choice D can explain the paradox.

You pose an interesting question about answer choice B. The problem the stimulus raises is not so much why businesses would choose not to relocate to areas that have lack of proximity to markets or raw materials. Common sense would tell us markets and raw materials are things businesses need, so it's not surprising businesses would avoid areas lacking them. What is surprising is that businesses seem less concerned with high taxes. So that's the fact that really requires explaining, which answer choice B does nicely (in way that a couple others up the thread elaborated on very well).

I hope this helps!

Jeremy

[annabelle.swift]

Hi! I chose B, but just wanted to double-check my reasoning for eliminating C.

C talks about already-established businesses leaving a municipality, whereas the paradox in the stimulus talks about municipalities losing PROSPECTIVE businesses.

Is this reason enough to get ride of C? Thanks

[Adam Tyson]

It sure is, annabelle.swift! That, along with the fact that high taxes are not supposed to have that big an effect, and this answer shows the taxes having a big effect, which is the opposite of what we want to see, make this a bad answer. Answer C is either irrelevant (because it is about businesses that are already in a place rather than new startups in the area or those that are considering relocating to that place, and also because "higher than before" is not the same as "higher than average") or harmful (because it shows higher business taxes driving businesses out when we want them not to matter that much).