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Critical Reasoning: Inference Questions

The cost of manufacturing mobile phones in Country X is 16% less than the cost of manufacturing mobile phones in Country Y. Even after customs and transportation fees are added, it is still cheaper for Motorabilia, a company based in Country Y, to import mobile phones from Country X than to manufacture mobile phones in Country Y.  

The statements above, if true, best support which of the following assertions?

Incorrect.

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This answer choice provides irrelevant information about the time it takes to manufacture mobile phones. However, you should be looking for a conclusion based on the existing premises, which focus on the costs of manufacturing mobile phones versus the costs of importing them.

Incorrect.

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Information about the percentage of exported mobile phones is irrelevant as the argument focuses on the costs of manufacturing mobile phones versus those of importing them. The conclusion should thus also focus on the cost aspect of mobile phones.

Incorrect.

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While the premises tell us that mobile phone production costs are 16% cheaper in Country X, we cannot infer that this reflects directly on the cost of labor in Countries X and Y as this involves many assumptions. For example, even though the cost of labor may be higher in Country X, the low costs of materials or taxation could be the cause for the total low production price.

Incorrect.

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This answer choice contradicts the data in the premises. If the combined costs of customs and transportation fees of mobile phones from Country X to Country Y are more than 16% of the cost of manufacturing the mobile phones in Country Y, it means Motorabilia should pay more for importing mobile phones than it would for producing them in Country Y.

Excellent!

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This answer choice provides a logical conclusion to the premises. Because manufacturing costs are 16% higher in Country Y than they are in Country X, importing mobile phones from Country X to Country Y is less expensive than manufacturing them in Country Y only if the combined costs of customs and transportation are lower than 16% of the manufacturing costs. 

Manufacturing a mobile phone in Country X takes 16% less time than the time it takes to manufacture a mobile phone in Country Y.
Country X exports more than 16% of the mobile phones that are manufactured in it.
Labor costs in Country X are 16% lower than those in Country Y. 
The combined costs of customs and transportation fees of mobile phones from Country X to Country Y are more than 16% of the cost of manufacturing the mobile phones in Country Y.
The transportation and customs fees for a mobile phone being imported from Country X to Country Y are less than 16% of the cost of manufacturing the mobile phone in Country Y.