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Any tax relief received by the solar industry would not benefit the homeowner who installs a solar-energy system. Even though homeowners would pay a lower price for solar-energy system installations because of this tax relief, with the government paying the balance, government revenues come from the public.

The argument above is based on which of the following assumptions?

  1. The tax relief would cause the homeowner to lose, through taxes or reduced government benefits or both, an amount at least equal to the reduction in the price of that homeowner’s solar-energy system installation.
  2. The tax relief that would be received by solar-energy industries would not be offered at the same time as any tax relief for other industries.
  3. Advertisements of the solar-energy industry, by failing to identify the source of government revenues explicitly to the public, mask the advantage the industry receives from the public.
  4. Homeowners generally believe that they benefit from any tax relief offered to the solar-energy industry.
  5. Tax relief would encourage solar industries to sell solar-energy systems at higher prices.

Highlight to see answer: A

Please post your explanations in the comments below!

In the suburbs surrounding Middletown, there is an average of 2.4 automobiles per family, and thus very few suburban residents use public buses. The suburban communities, therefore, would derive little benefit from continuing to subsidize the portion of Middletown’s public bus system that serves the suburbs.

Which of the following, if true, casts the most serious doubt on the conclusion drawn above?

  1. The real-estate tax rate in Middletown is higher than it is in the suburbs.
  2. Last year voters in the suburban communities defeated by a narrow margin a bill designed to increase subsidies for public bus routes.
  3. Many suburban shops can attract enough employees to remain in business only because subsidized public transportation from Middletown is available.
  4. Public buses operated with less than a 35 percent occupancy rate produce more pollution per passenger mile than would the operation of private automobiles for each passenger.
  5. Most voters in Middletown’s suburban communities are unwilling to continue subsidies for public buses next year if ridership on those buses drops below current levels.

Highlight to see answer: C

Please post your explanations in the comments below!

For the safety-conscious Swedish market, a United States manufacturer of desktop computers developed a special display screen that produces a much weaker electromagnetic field surrounding the user than do ordinary screens. Despite an advantage in this respect over its competitors, the manufacturer is introducing the screen into the United States market without advertising it as a safety improvement.

Which of the following, if true, provides a rationale for the manufacturer’s approach to advertising the screen in the United States?

  1. Many more desktop computers are sold each year in the United States market than are sold in the Swedish market.
  2. The manufacturer does not want its competitors to become aware of the means by which the company has achieved this advance in technology.
  3. Most business and scientific purchasers of desktop computers expect to replace such equipment eventually as better technology becomes available on the market.
  4. An emphasis on the comparative safety of the new screen would call into question the safety of the many screens the manufacturer has already sold in the United States.
  5. Concern has been expressed in the United States over the health effects of the large electromagnetic fields surrounding electric power lines.

Highlight to see answer: D

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Bonuses at DSR Industries cannot be awarded unless profits exceed a ten percent return on stockholders’ investments in the company. Higher profits mean higher bonuses. Therefore, bonuses in a year of general economic recession will be considerably lower than bonuses in a year of peak profits at DSR.

The conclusion above depends on the assumption that

  1. the firm will have relatively low profits in recession years
  2. the amount represented by a ten percent return on stockholders’ investments in the company will increase from year to year
  3. profits rarely exceed a ten percent return on stockholders’ investments in the company
  4. profits in excess of a ten percent return on stockholders’ investments in the company are all distributed in the form of bonuses
  5. bonuses at DSR never drop to zero

Highlight to see answer: C

Please post your explanations in the comments below!

The fossil record shows that the climate of North America warmed and dried at the end of the Pleistocene period. Most of the species of large mammals then living on the continent became extinct, but the smaller mammalian species survived.

Which of the following, if true, provides the best basis for an explanation of the contrast described above between species of large mammals and species of small mammals?

  1. Individual large mammals can, in general, travel further than small mammals and so are more able to migrate in search of a hospitable environment.
  2. The same pattern of comparative success in smaller, as opposed to larger, species that is observed in mammals is also found in bird species of the same period.
  3. The fossil record from the end of Pleistocene period is as clear for small mammals as it is for large mammals.
  4. Larger mammals have greater food and space requirements than smaller mammals and are thus less able to withstand environmental change.
  5. Many more of the species of larger mammals than of the species of smaller mammals living in North America in that period had originated in climates that were warmer than was that of North America before the end of the Pleistocene period.

Highlight to see answer: D

Please post your explanations in the comments below!

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