12bhang wrote:
According to the Tristate Transportation Authority, making certain improvements to the main commuter rail line would increase ridership dramatically. The authority plans to finance these improvements over the course of five years by raising automobile tolls on the two high-way bridges along the route the rail line serves. Although the proposed improvements are indeed needed, the authoritys plan for securing the necessary funds should be rejected because it would unfairly force drivers to absorb the entire cost of something from which they receive no
benefit.
. Which of the following, if true, would cast the most doubt on the effectiveness of the authoritys plan to
finance the proposed improvements by increasing bridge tolls?
(A) Before the authority increases tolls on any of the area bridges, it is required by law to hold public hearings at which objections to the proposed increase can be raised.
(B) Whenever bridge tolls are increased, the authority must pay a private contractor to adjust the automated toll-collecting machines.
(C) Between the time a proposed toll increase is announced and the time the increase is actually put into effect, many commuters buy more tokens than usual to postpone the effects of the increase.
(D) When tolls were last increased on the two bridges in question, almost 20 percent of the regular commuter traffic switched to a slightly longer alternative route that has since been improved.
(E) The chairman of the authority is a member of the Tristate Automobile Club that has registered strong opposition to the proposed toll increase.
Choice D: If 20% shifted the last time and even if we do assume that this process will happen this time, we are only talking about 20% of the population. 80% of the people might well go ahead and use the toll bridge.Why is this taken to be the correct answer?
If we compare this with choice C: Many commuters will buy tokens in advance. Now we do not what many is. It could be 5% it could be 80% or whatever. And also we do not know for how long these coupons will last. Its possible that the commuters buy them for the entire duration of 5 years
why pick c over d?
both need similar levels of assumptions to weaken
benefit.
. Which of the following, if true, would cast the most doubt on the effectiveness of the authoritys plan to
finance the proposed improvements by increasing bridge tolls?
(A) Before the authority increases tolls on any of the area bridges, it is required by law to hold public hearings at which objections to the proposed increase can be raised.
(B) Whenever bridge tolls are increased, the authority must pay a private contractor to adjust the automated toll-collecting machines.
(C) Between the time a proposed toll increase is announced and the time the increase is actually put into effect, many commuters buy more tokens than usual to postpone the effects of the increase.
(D) When tolls were last increased on the two bridges in question, almost 20 percent of the regular commuter traffic switched to a slightly longer alternative route that has since been improved.
(E) The chairman of the authority is a member of the Tristate Automobile Club that has registered strong opposition to the proposed toll increase.
Choice D: If 20% shifted the last time and even if we do assume that this process will happen this time, we are only talking about 20% of the population. 80% of the people might well go ahead and use the toll bridge.Why is this taken to be the correct answer?
If we compare this with choice C: Many commuters will buy tokens in advance. Now we do not what many is. It could be 5% it could be 80% or whatever. And also we do not know for how long these coupons will last. Its possible that the commuters buy them for the entire duration of 5 years
why pick c over d?
both need similar levels of assumptions to weaken
Answer choice C makes mention of some commuters buying tokens in advance to limit the effect of the increase. This means that the authority is starved of some revenue; however, the time horizon in question is over 5 years. Even if every single consumers bought some number of tokens in advance, it's very unlikely that everyone would buy 5 years worth of tokens. And, even if every consumer did buy 5 year's worth of tokens, the authority will still enjoy 5 year's worth of revenue at the original toll rate. C doesn't fundamentally undermine the financing plan.
On the other hand, D remarks on a situation where, following a previous rate increase a full 20% of drivers switched routes (presumably forever). D further mentions that the alternate route in question has since been improved, implying that it is now suitable for more drivers and/or a more attractive alternative. If the authority increases tolls, then it stands to reason that some number of drivers, possibly more than 20%, will switch to the now improved alternate route. And, unlike the token hoarders above, this switch will likely be permanent and that revenue will be lost to the authority.
For that reason, D is a stronger answer because it offers a more systemic threat to the financing arrangement, given the 5 year financing described in the passage.