Critical Reasoning section 1 MCQ Detailed Explanation And More Example

Question : 1

The company encourages its managers to interact regularly, without a pre-set agenda, to discuss issues concerning the company and society. This idea has been borrowed from the ancient Indian concept of religious congregation, called satsang. Designations are forgotten during these mettings; hence, it is not uncommon in these meetings to find a sales engineer questioning the CEO on some corporate policy or on his knowledge of customers Based on the information provided in the above passage, it can be inferred that

a) The company is concerned about its reputation with its employees.

b) The company has some inter-personnel problems in the past due to which it felt the need for these corporate satsangs.

c) The company believes in fostering the spirit of dialogue without degenerating it into a position-based debate.

d) All of the above

Question : 2

In order to qualify in an examination having 6 subjects, a student has to get at least 50% and above marks separately in any 4 subjects and 35% and above in each of the 6 subjects. If a total of 25% candidates have qualified in the examination, then which of the following is definitely true?

a) 50% of the students got 50% and above in 4 subjects but only half of them could get 35% and above in all the subjects.

b) 25% of the students have secured 50% and above in all the 6 subjects.

c) 75% 'of the students could not get at least 35% marks in all the 6 subjects taken together.

d) At least 25% of the students could get at least 35% and above marks in each of the subjects.

Question : 3

Most large retail stores of all goods and brands hold discount sales in the month of November. The original idea of price reduction campaigns in November became popular when it was realized that the sales of products would generally slow down following the Diwali rush. The lack of demand could be solved by the simple solution of reducing prices. There is now an increasing tendency among major chains of stores across the country to have their "November sales" begin before Diwali. The idea behind this trend is to endeavour to sell the maximum amount of stock at a profit, even if that may not be at the maximum profit. Which of the following conclusions cannot be drawn from the above?

a) The incidence of "early" November sales results in lower holdings of stocks with the corollary of lower stock holding costs.

b) Major stores seem to think it makes sense to have the November sales campaigns pre-Diwali.

c) Demand is a function of price; as you lower price, demand increases.

d) The major department stores do not worry as much about profit maximization as they do about sales maximization.

Question : 4

Argentina's beef cattle herd has dropped to under 50 million from 57 million ten years ago in 2004. The animals are worth less, too: prices fell by over a third last year, before recovering slightly . Most local meat packers and processors are in financial trouble, and recent years has seen a string of plant closures. The Beef producer's Association has now come up with a massive advertisement campaign calling upon Argentines to eat more beef-their "juicy, healthy, routed, platefilling steaks." Which one of the following , if true, would contribute most to a failure of the campaign?

a) There has been a change in consumer preference towards eating leaner meats like chicken and fish.

b) The inability to cross breed native cattle with improved varieties has not increased production to adequate levels.

c) Prices of imported beef have been increasing, thus making locally grown beef more competitive in terms of policy.

d) Animal rights pressure groups have come up rapidly, demanding better and humane treatment of farmyard animals like beef cattle

Question : 5

Cigarettes constitute a mere 20% of tobacco consumption in India. And fewer than 15% of the 200 million tobacco users consume cigarettes. Yet these 15% contribute nearly 90% of the tax revenues to the Exchequer from the tobacco sector. The punitive cigarette taxation regime has kept the tax base narrow, and reducing taxes will expand this base. Which one of the following best bolsters the conclusion that reducing duties will expand the tax base?

a) The cigarette manufacturers' association has decided to indulge in aggressive promotion.

b) The cigarette manufacturers are lobbying for reduction on duties.

c) There is a likelihood that tobacco consumers will shift to cigarette smoking if cigarette prices were to reduce.

d) An increase in duties on non-cigarette tobacco may lead to a shift in favour of cigarette smoking.

Question : 6

Inflation can only be fundamentally caused by two factors— supply side factors and demand side factors. These factors are either reductions in the supply of goods and services or increase in demand due to either the increased availability of money or the reallocation of demand. Unless other compensating changes also occur, inflation is bound to result if either of this occurs. In economies prior to the introduction of banks (a pre-banking economy) the quantity of money available, and hence, the level of demand, was equivalent to the quantity of gold available. If the statements above are true, then it is also true that in a pre-banking economy:

a) any inflation would be the result of reductions in the supply of goods and services.

b) if there is a reduction in the quantity of gold available, then, other things being equal, inflation would result.

c) if other factors in the economy are unchanged, increasing the quantity of gold available would lead to inflation.

d) whatever changes in demand occur, there would be compensating changes in the supply of goods and services.