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ST-7 (Critical Reasoning)

Description: Critical Reasoning Test - 7
Number of Questions: 15
Created by:
Tags: Critical Reasoning Test - 7 Critical Reasoning Conclusion Inference Paragraph Completion Strengthen
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Directions: Read the passage/argument and answer the question that follows it.

Give people power and discretion, and whether they are grand viziers or border guards, some will use their position to enrich themselves. The problem can be big enough to hold back a development of country. One study has shown that bribes account for 8% of the total cost of running a business in Uganda, while another one found that corruption boosted the price of hospital supplies in Buenos Aires by 15%.

Which of the following could be the most valid inference from the above paragraph?

  1. Corruption is a universal phenomenon.

  2. Corruption is an inevitable phenomenon.

  3. Corruption cannot be tamed at all.

  4. The only people who are not corrupt are those not having power and discretion.

  5. Corruption can raise the cost of hospital care or running a business.


Correct Option: B
Explanation:

Option (3) is ruled out as the passage does not even hint at checking corruption. The tag of universal given to corruption in option (1) cannot be justified with two examples because the passage fails to either quote or hint at its geographical spread. These are isolated examples of what corruption can do to different aspects of human activity. Option (4) is again unjustified because the very first line mentions the word some, which means there are other people having power and discretion and who are still not corrupt. Option (5) does not summarize the basic point being made here i.e. corruption is unavoidable when people have power and discretion. This is aptly done by option (2).

Directions: Read the passage/argument and answer the question that follows it.

John Nash, then barely 21, was certainly a genius to have come up with the first theory of nearly everything. ______. Most scientific theories apply to just one particular area. But game theory, the subject Nash is best known for, applies to any situation involving a mix of competition and cooperation -- corporate rivalry, political competition, Darwinian struggles. The thesis of Nash was just one of a spectacular series of problems that he solved before he turned 30 and the onset of delusions and hallucinations sapped his creative powers. In fact, most of the mathematicians I interviewed insisted that contribution of Nash to game theory was the most trivial of his accomplishments.

Which of the following best completes the missing text?

  1. Nobody could really understand his theory.

  2. It was the most spectacular theory that was ever written.

  3. Not even the best of brains could understand it, so difficult it was.

  4. That's no exaggeration, either.


Correct Option: D
Explanation:

………the first theory of nearly everything. ________. Most scientific theories apply to just one particular area. Note the word everything carefully. This word has been written in the next line consequent to the idea of his being a young genius. Certainly everything is all inclusive. Option (4) fits in perfectly as a filler as it supplies the necessary counter-reply to the possible resistance cropping up in the reader's mind over the word everything. The only competition to it seems to be (5) to some extent, but it does not fit in with the flow of though here.

Directions: Read the passage/argument and answer the question that follows it.

Small companies are always very defensive in terms of protecting their own turf. They tend to firmly resist any attempt at invasion of their territory by another bigger rival company and will do their best to avert it from happening. They quote examples to prove that such incursions have invariably eaten into their market shares and consequently, profits. They fail to realize that ultimately, competition is going to do a whole world of good to their operations.

Which of the following will tend to support most the standpoint of small companies?

  1. Many small firms have gone down under once bigger firms entered their arena of operation.

  2. The average rate of profit growth for small companies has always fallen by a significant margin every time the sector has seen a new, bigger entrant.

  3. There has been no change in the profit levels of bigger entrants which invade the territory of small firms.

  4. Small companies typically form a cartel to meet the onslaught of bigger companies more effectively.

  5. The Competition Promotion Council has mandated that in future, the bigger companies will not be allowed to enter any product area wherein more than 70% market share is held by small companies.


Correct Option: B
Explanation:

Option (1), which highlights the fact of small firms going down under as a consequence of the entry of bigger players, carries the idea too far. The only claim being made by small companies is that they suffer decline in profits in such situations. Besides, it is many, not all companies, which makers it doubly wrong as an answer choice. Option (3) tends to weaken the small companies viewpoint. Hence, it ruled out. Option (4) makes an irrelevant remark which ahs no bearing on the question. Option (5) is putting a big rider on the entry of bigger players and in fact, will not be universally applicable. So the extent of application of this provision is not known. The correct option (2) is in line with the point raised by small companies given in the paragraph and is therefore, the best possible choice.

Directions: Read the passage/argument and answer the question that follows it.

In the esoteric world of finance, no new idea is complete without its Greek symbol. In the distant past, picking the best stocks was just seen as being clever; now that skill is known as 'alpha'‌. The letter 'beta‌ is for the boring, old style of simply tracking the market. But what if you can find exciting, new markets to track markets that do not move in step with shares or government bonds? That could be extremely valuable. ___________________

Which of the following would complete the above paragraph?

  1. Though it may involve greater risk, it certainly has the potential of generating superior returns over the long term.

  2. It could be more profitable in terms of providing a certain stability and consistency to your overall returns.

  3. Hence the “alternative beta” which refers to non-traditional source of return-based market validity or arbitrage between the spot and futures rates.

  4. But what about “gamma”- the X or zing sector that makes every fund manager or investor a unique animal in the jungle of investment?


Correct Option: C
Explanation:

Option (1) is not factually supported by the paragraph as the paragraph only talks of particular avenues of investment, which may or may not yield some returns. So the question of superior returns or the potential thereof, does not arise at all. Again, option (2) can be similarly ruled out because stability and consistency - these two concerns are hardly addressed by the newer avenues (at least, the paragraph does not support it). Option (4) introduces an interesting, but irrelevant aside in the form of that unknown zing factor. Option (5) represents a possible closing line, but is hardly supported by the contents given in the paragraph. The focus of the paragraph remains on the idea of encoding everything in finance with as symbol. Go back to the first line, the emphasis is on Greek letter. Hence, option (3).

Directions: Read the passage/argument and answer the question that follows it.

Though the number of cycle owners in China is increasing by leaps and bounds, yet very few owners make real use of their equipment. For instance, last year more than 100 million bicycles were sold, but not more than 10 million owners cycle down to their workplace at least twice a week or use it for physical exercise at least thrice a week.

Which of the following, if true, tends to cast the most doubt on the assertion that very few Chinese make real use of the bicycles they purchase?

  1. The Chinese are notorious for exaggerating on surveys about the use of their bicycles.

  2. The bicyclists who use their bicycles for shopping can use it for other, non-shopping activities, too.

  3. Bicycle owners can often use their bicycles for other activities like shopping, sports etc.

  4. Most bicycle users own at least one more mode of transportation.

  5. Studies show that the Chinese bicyclists are less likely to use bicycles in future, if they have been involved in a road accident.


Correct Option: C
Explanation:

If the Chinese are guilty of exaggerating about bicycle use, it tends to further support the author's contention and is therefore the opposite of what we are trying to locate. Hence, option (1) is wrong here. Option (4) is irrelevant for it talks of another mode of transport, which is not the focus of discussion. Option (5) creates a scenario of an accident being responsible for lesser use of bicycle in future. In a way, it discusses possible reasons for lesser bicycle use by the Chinese. Option (2) is again irrelevant here as it talks of the use of bicycle for shopping, while the author equates the use of bicycling with exercise and going to office. Option (3) is the best one for it points out a major flaw in the author's reasoning because it highlights other possible uses which the bicycles can be put to by the Chinese, thereby negating the hypothesis that not much real use of bicycles takes place.

Directions: Read the passage/argument and answer the question that follows it.

It is extremely difficult to confront someone with facts in a plain, honest manner. It's also not so easy to evaluate and apply a carrot-and stick policy. I can easily recall when we attended a very much grounded-in-reality self-assessment camp with our senior staff about our consumers, competition, and our performance. Clearly, one cannot do one's own interpretation of what is wrong and castigate people, to motivate them for change; you need to hold a mirror to them. So, I wrote down the things these managers had themselves said two years earlier about the company. Also included were the things customers had said about us, both gung-ho and nasty. When confronted with the inescapable facts of what they had said about themselves and what customers had told us, managers accepted the truth.

According to the paragraph above,

  1. assessing others and punishing others is not so easy

  2. senior managers are not realistic people

  3. one has to be realistic to confront reality

  4. it is not correct to assess others and punish them

  5. self-appraisal is the best way to learn reality


Correct Option: A
Explanation:

Option (2) is utterly irrelevant here as there is nothing said about the realism of senior managers. The passage hints at the idea that assessing others and punishing them is not easy. Thus option (4) is not correct while option (5) is wrong due its being unjustified in the context of this passage. Option (1) is best supported by the first few lines of the paragraph.

Directions: Read the passage/argument and answer the question that follows it.

The most irksome contributors to the Wikipedia, globally the most global blog, do get censored eventually, though they can always log in under a new identity. Other drawbacks are the subject of earnest internal debate too, such as the Wikipedia's inherent bias towards trivial recent events rather than important historical ones. That is already undergoing a subtle change, slowly, though subjects of interest to northern white computer-literate males are over-covered, while those of interest to others are under-covered in terms of space devoted and the prominence given.

Which of the following options is best supported by the above selection? Mark it as your answer.

  1. The Wikipedia has been very receptive to the flow of critical ideas.

  2. The Wikipedia has always given fair and just treatment to every user community.

  3. The Wikipedia is under no obligation to either respond to or act on criticisms.

  4. Despite all its shortcomings, the Wikipedia is a genuine attempt at creating a blog on virtually anything and everything under the Sun.

  5. The Wikipedia is possibly the biggest online reference source for virtually anything under the Sun.


Correct Option: D
Explanation:

The idea of its being the biggest reference source is not given at all, hence ruling out option (5). Options (1) and (5) again are not supported by the paragraph anywhere. Option (2) tends to go against the idea of the passage, which highlights its biasness in this regard. Option (4) summarises the paragraph aptly, while acknowledging both negative and positive features of the Wikipedia.

Directions: Read the passage/argument and answer the question that follows it.

Small companies are always very defensive in terms of protecting their own turf. They tend to firmly resist any attempt at invasion of their territory by another bigger rival company and will do their best to avert it from happening. They quote examples to prove that such incursions have invariably eaten into their market shares and consequently, profits. They fail to realize that ultimately, competition is going to do a whole world of good to their operations.

Which of the following is the biggest flaw in the context of the counter-point made by the author?

  1. It is circular reasoning which leads us nowhere.

  2. It does not contain any numerical data to prove the point.

  3. It is entirely irrelevant to the question in hand.

  4. It does not justify the point at all.


Correct Option: D
Explanation:

“They fail to realize that ultimately, competition is going to do a whole world of good to their operations.” This line no way justifies what good is done to small companies by more competition. At best, it is a fairly general, unproven remark in this context. Hence, option (4) is the best one. Option (3) is totally off the mark while (1) is unjustified as the reasoning used is unidirectional. Giving numerical data is the best thing to prove a point, but it is not mandatory, nor is it possible in many cases. So option (2) is incorrect.

Directions: Read the passage/argument and answer the question that follows it.

To counter the growing claims ratio of its clients, who take a mediclaim policy for themselves and their dependents, the United Insurance Corp, Pollock has decided to act tough. Most clients take the floater plan wherein the entire medical cover gets transferred to one family member at the time of a medical requirement, if it is not availed of by another family member. This happens within the limits of the total cover available to the family as a whole. The problem has become so acute that currently, the company has slipped into the red, following claims of $1.5 filed for every single dollar collected by it as policy premium.

Which one(s) out of the following, assuming that it is permissible and practically feasible, would MOST CONTRIBUTE to alleviating the problem being faced by the company?

  1. Raising the premium applicable to the respective policies.
  2. Re-look at the accounting policies followed by United Insurance Company.
  3. Refusing to allow the transfer of medical cover to other family members.
  4. Suspending the payment of dividend on stocks held by its stakeholders.
  5. Refusing to give policies to people who suffered from serious illness as children.
  1. 1, but not 2, 3, 4 and 5

  2. 1 and 2 but not 3, 4 and 5

  3. 3, 4 and 5 but not 1and 2

  4. 1and 3 but not 2, 4 and 5

  5. 1, 4 and 5 but not 2 and 3


Correct Option: A
Explanation:

The problem being discussed here is that the company is running in losses due to higher claim ratios which are not going to be solved by having a re-look at accounting policies (option choice 2), or suspending the payment of dividend (choice 4- there is hardly any question of any dividend payment if the company is running in losses already) or refusing policies to adult who had serious disease as a child (choice 5 how do we decide it?). Refusing to allow a floater cover (choice 3) defeats its very purpose, which will drive away the customers. Hence, none of these steps is going to solve the problem at all.  In the given circumstances, choice 1 seems to be the most sensible one. Hence option (1) is the correct answer.

Directions: Read the passage/argument and answer the question that follows it.

Ever since the liquor sale and use laws have been liberalized, enabling easy sales and consumption by the city people, the crime rate in Dalmatian has significantly come down from 24 crimes per thousand per year to 14 crimes per 1000 per year. The city council surmises that this is entirely due to the liberal liquor laws and therefore, plans to do away with other liquor restrictions also, so as to achieve its goal of a crime-free city in the next five years.

Which of the following could be a possible FLAW in the reasoning employed above?

  1. Last year, there was a shift in the definition of crime adopted by the city police.

  2. The city council has failed to take into account the crime rate prevailing in the villages falling under it.

  3. The rate of serious crimes prevailing in a city is hardly factored into the overall crime rate.

  4. The city council failed to consider other plausible reasons for the observed decline in the crime rate.

  5. Similar liquor laws in other states have been entirely unsuccessful.


Correct Option: D
Explanation:

The paragraph talks of a negative correlation between liquor consumption and crime rate, which to be proved beyond any reasonable doubt to come to a firm conclusion. In this context, option (1) is a tricky answer as it talks of a shift in the definition of crime. It could have been a possible correct answer but for this expression, which could mean a more liberal or tighter definition. Now, if the new definition is tighter, it will result in fewer reported crimes while if the definition has been liberalized, it will result in more reported crimes. Hence, it is not possible to conclude anything with certainty in this case. Option (5) works on the basis of modeling, which is a poor way of reasoning. Hence, ruled out. Option (3) tries to trick the reader into believing that if serious crimes are not factored into the overall crime rate, it renders the entire idea useless. Please note carefully, the passage does not talk of the serious crime rate. Thus the option can be ruled out. So is true of option (2) which alludes to villages, which are hardly a topic of concern for we are talking about the city only. Hence, it is irrelevant as an answer choice. There could have been many possible reasons for the observed fall in crime rate. When several possibilities exist to account for an observed phenomenon, we need to rule out all others before we can zero in on a particular causal factor. The crime rate could have fallen due to more vigilance by people, better police efficiency or anything else. Simply because we happened to witness two things simultaneously does not necessarily mean that one is causing the other. Hence, choice (4) happens to the best one.

Directions: Read the passage/argument and answer the question that follows it.

Strikingly, the number of internet users in China has reached a mind-boggling 210 million. The figure is a staggering statistic, up by more than 50% as compared to the previous year and more than three times the number for India, the emerging Asian giant with which China is most often compared. Analysts expect that in a few months from now, China will have more internet users than the US, the current leader. And because the proportion of the internet user population is so low, at just 16%, rapid growth is likely to continue for some time.

Which of the following is an implicit ASSUMPTION underlying the above argument?

  1. At low base rates, we can expect much more significant improvement percentage wise than we can at higher base rates, comparatively speaking.

  2. China will overtake the US in the foreseeable future in terms of internet user population.

  3. A much greater percentage of the US population is using the internet now as compared to what we have in China.

  4. Many more Chinese are becoming tech-savvy than they were before.

  5. The current internet user population in India does not exceed 70 million.


Correct Option: A
Explanation:

Option (2) represents, at the most, a reiteration of a point directly stated in the passage. Hence it cannot be an assumption at all. Option (3) is not justified because the passage does not hint at anything regarding the percentage of the US population using the internet. At the most, it could be classified as an invalid conclusion, drawn on the basis of the contents given here. In no case does it become an inherent assumption underlying the argument. Option (4), if we place it at the end of the passage, could have become a suitable conclusion, which follows logically from the passage here.  Option (5) refers to a very secondary fact stated in the passage about China’s user population being thrice that of India. But the author primarily makes a point about China and the US, not about India. Thus, it is ruled out despite being numerically correct. Option (1) is the best answer as the paragraph clearly mentions in the last line that due to low user base, the rapid pace of growth is likely to continue, implying thereby that we can add much more at low levels rather than at higher levels of base value.

Directions: Read the passage/argument and answer the question that follows it.

The emergence of Internet endangers the readership of print media in the US. By every stretch of data available, the country has seen a perceptible decline in the cumulative readership of newspapers and magazines.

Which one(s) out of the following is most closely PARALLEL to the above argument given here?

  1. The mathematics faculty in my college never tried to make the subject interesting for us. Consequently, I fear mathematics till date and probably will do so in future, too.

  2. In Texas, ever since the state government curtailed the use of cell phones in high schools, there has been a marked improvement in attendance levels.

  3. The police say that in most of the US states, the spurt in teenage crimes can be attributed to an increase in the number of licensed weapons held by their parents.

  4. The proliferation of the Zana tribe in the Caribbean islands has led to a perceptible shift in crime levels for these tribals are professional criminals.

  5. The city council in Carnation has decided to pass a resolution providing for the immediate arrest of those found violating any of its traffic laws, so as to ensure utmost compliance.


Correct Option: B
Explanation:

The paragraph talks of a negative correlation between internet user base and the readership of print media. The correct answer would be one talking of a similar negative correlation, regardless of the subject matter or content. From this perspective, option (3) talks of a positive correlation, wherein two variables move in the same direction. Thus option (3) is wrong here. Option (1) and (5) are irrelevant to the question in hand as they do not talk of any correlation at all. Option (4) is a deceptively plausible answer as it uses the word shift which could mean either way. Hence it is not justified. Choice (3) can be rejected because it alludes to a positive correlation between two variables i.e. a rise in crime rate along with a rise in the number of licensed weapons. The best possible choice is (2), which talks of a spurt in attendance along with a fall in the use of cell phones on school campuses, implying a negative correlation.

Directions: Read the passage/argument and answer the question that follows it.

Very few inputs influence the US economic system as much as oil prices. Oil runs the cars, trucks and planes that transport people and products. As oil prices rise, costs rise for transportation companies such as airlines and freight delivery companies, squeezing their profit margins. Downstream of these companies, customers who rely on them to get products to markets are similarly impacted by higher prices. Contrarily, most energy companies benefit from higher oil prices, either from higher oil revenues, or due to more demand for alternatives like ethanol and clean energy. Car companies with fuel conservation technology such as hybrid engines can expect more sales as consumers feel the pinch of higher oil prices, while those who rely on sales of Sports Utility Vehicles may feel challenged business-wise.

The author conveys his point primarily by

  1. creating an analogy between two directionally dissimilar but logically equivalent phenomena

  2. making use of an example to illustrate something else happening in an entirely different field

  3. analysing a phenomenon in terms of the a chains of cause and effect

  4. using points and counter-pints in favour of and against a particular idea

  5. using a set of phenomena to illustrate how the two, despite being opposed to each other, are still the same


Correct Option: C
Explanation:

An analogy, by definition, compares two sets of phenomena, each containing a set of minimum two items. This is not the case here, thereby ruling out option (1). The area of discussion remains only and only the impact of rising oil prices on different sets of industries and people. No idea has been favoured or criticised by the author. Thus option (4) is again wrong. Option (5) could be similarly ruled out as the two kinds of effects being discussed are not the same. Option (3) happens to be the best choice in that the author mainly talking about the sequential effects of an oil price rise on different industries and people.

Directions: Read the passage/argument and answer the question that follows it.

A phenomenon that is unique to humans is deferred gratification - patient anticipation of a reward. Dr Reyes-Garcia et al therefore argued that as the Tsimane became more enmeshed in modern society, the more patient of them would do better than the less. The traditional of Tsimane subsistence economy depends on folk knowledge and learned skills that have quick pay-offs. Formal schooling does not pay off for years, but opens the door to bigger potential incomes.

Which of the following would be best possible way of evaluating the Reyes-Garcia hypothesis?

  1. Looking at the length of schooling and average incomes of different people.

  2. Looking at the ages and incomes of different people.

  3. Looking at the incomes of people and knowing what they had to do to achieve those respective levels.

  4. Looking at the incomes of farmers and comparing it with what they ancestors had earned as farmers.

  5. Looking at the minimum level of annual income above which people start sending their children to school.


Correct Option: A
Explanation:

Option (2) talks of one’s age as being a parameter in deciding one’s income. More age could imply better skills, it could also imply income from other sources or something else. So evaluating this data may not yield much as we would not be sure whether older people did have more education or not. Thus, option (2) is incorrect. Even option (3) is quite similar and is, therefore, wrong. Option (4) speaks of a comparison between the incomes earned by today’s farmers and their ancestors, without focusing on the patience level as a determinant of income. Again option (5) talks of the consequences of having a lesser or a higher income in the form of ability to send children to school, which will not help us at all in evaluating the hypothesis.  Correlating average incomes and the length of schooling will establish the truth or otherwise of the hypothesis as the main point is whether patience has its rewards in the form of better income or not. Hence, option (1) is the best choice

Directions: Read the passage/argument and answer the question that follows it.

In a closely watched decision, the US Supreme Court overturned damages of $79.5m against Philip Morris that were awarded by a jury in 2007. The case was about an Oregon man who had smoked for 42 years and died of lung cancer. The Supreme Court decreed that the jury award to his widow had overstepped the mark by punishing the cigarette-maker for harm done to others, but it failed to set any ceiling on future punitive-damage awards and sent the case back to state of Oregon Supreme Court for a new hearing.

Which of the following is the most serious objection to the ruling of the US Supreme Court?

  1. The Supreme Court has quashed a decision given by one of its lower courts.

  2. The court has left the entire field open by not defining how much is too much.

  3. The case has been decided by the court without referring to similar precedents.

  4. The court has adjudicated upon a case involving a medical question without referring it to a medical panel.

  5. The award of the court has the potential to render bankrupt one of the most important players in the cigarette industry.


Correct Option: B
Explanation:

In principle and in practice both, a higher court does have the authority to quash a decision given by its lower courts. Adjudicating upon appeals from lower courts is what it is meant for. In principle, it cannot be faulted on this ground, hence, ruling out option (1). Option (3) is not justified either within the context or outside of it. The case did not involve a medical question. It is certain that the man in question had died of lung cancer due to heavy cigarette smoking. The real question is that of deciding to what extent the company responsible for harm done to a man and its liability in this regard. Option (4), therefore, is incorrect. Option (5) addresses a very secondary question, which is definitely taken into account while awarding punitive damages but it is certainly not a major factor. It is mainly the gravity of the offence that is being discussed. 

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