August 12, 2017

GMAT Verbal: Critical Reasoning Questions

Student A and Student B have both applied for acceptance at Top Class University. The university admits students based on their GPA and interview scores, which are combined to produce a total score. They will only accept either Student A or Student B. Student A has a 3.0 GPA and obtained a score of 78% on the interview. Student B has a 3.5 GPA and obtained a 60% on the interview.

1. If the following statements are true, which of the following assertions is best supported?

A) Student A and Student B will both be admitted to Top Class University.
B) If the total score is based mainly on the interview, Student B will be admitted.
C) If the total score is based mainly on the GPA, Student A will be admitted.
D) If the total score is based mainly on the interview, Student A will be admitted.
E) If the total score is based equally on the GPA and interview, Student B will be admitted.

Correct Answer: D

Explanation: Student A outperformed Student B on the interview, but had a lower GPA. The score would have to be based mainly on the interview for Student A to be accepted in favor of Student B.

A manager of a large corporation divides his time between America and Germany. His travel costs are 20% of his total expenditures each month. Hiring an employee to oversee his Germany location will decrease the manager’s total expenditures each month. However, communicating by telephone and fax will add 5% to his total monthly expenditures.

2. If the following statements are true, which of the following assertions is best supported?

A) The employee hired to oversea the business in Germany is paid a sum equal to less than 20% of the manager’s monthly expenditures.
B) The employee hired to oversee the business in Germany is paid a sum equal to more than 20% of the manager’s monthly expenditures.
C) The manager’s overall monthly expenditures will increase by less than 5% as a result of hiring a new employee.
D) The manager’s overall monthly expenditures will be approximately equal after hiring an overseas employee.
E) The employee hired to oversee the business in Germany is paid a sum equal to the manager’s previous monthly expenditures.

Correct Answer: A

Explanation: The manager’s travel costs are 20% of the company’s total monthly expenditures. Since hiring an employee will reduce overall monthly expenditures, the employee’s salary must be equal to less than the value of the travel costs.

The cost of producing toys in the United States increases by 30%. As a result, to increase profits, a corporation decides to import these goods from another location. The cost to produce these goods decreases by 15%. The cost to import these goods adds 10% to the total cost. A tax is also imposed to bring these goods into the United States.

3. If all of the above statements are true, which of the following assertions is best supported?

A) The company will save money if the tax imposed is less then 10%.
B) The company will save money if the goods are of equal quality.
C) The company will lose money if the tax imposed is more than 5%.
D) The company’s profits will remain the same if the tax imposed is less than 3%.
E) The company will lose money, regardless of whether a tax is imposed.

Correct Answer: C

Explanation: The overall increase in production costs is 30%. Moving to another location decreases costs by 15%. Importing costs adds 10%, bringing the total costs up to 25% of the original cost of producing goods in the United States. Any tax over 5% would mean that the company would lose money, as it would add up to more than the 30% increase in production costs.