PrepTest 82, Section 2, Question 7
Economist: ChesChem, a chemical manufacturer located in Chester, uses natural gas for its enormous energy needs. Currently, natural gas costs twice as much in Chester as it does in Tilsen. If the cost of natural gas in Chester becomes more than twice that in Tilsen, ChesChem will move its manufacturing operations to Tilsen. So if the cost of natural gas in Chester increases at all, ChesChem will move its manufacturing operations to Tilsen.
Economist: ChesChem, a chemical manufacturer located in Chester, uses natural gas for its enormous energy needs. Currently, natural gas costs twice as much in Chester as it does in Tilsen. If the cost of natural gas in Chester becomes more than twice that in Tilsen, ChesChem will move its manufacturing operations to Tilsen. So if the cost of natural gas in Chester increases at all, ChesChem will move its manufacturing operations to Tilsen.
Economist: ChesChem, a chemical manufacturer located in Chester, uses natural gas for its enormous energy needs. Currently, natural gas costs twice as much in Chester as it does in Tilsen. If the cost of natural gas in Chester becomes more than twice that in Tilsen, ChesChem will move its manufacturing operations to Tilsen. So if the cost of natural gas in Chester increases at all, ChesChem will move its manufacturing operations to Tilsen.
Economist: ChesChem, a chemical manufacturer located in Chester, uses natural gas for its enormous energy needs. Currently, natural gas costs twice as much in Chester as it does in Tilsen. If the cost of natural gas in Chester becomes more than twice that in Tilsen, ChesChem will move its manufacturing operations to Tilsen. So if the cost of natural gas in Chester increases at all, ChesChem will move its manufacturing operations to Tilsen.
The economist's argument requires assuming that
ChesChem spends far more on natural gas than on any other expense
the price of natural gas in Tilsen will not increase
ChesChem would not be profitable if its energy costs increased
the only benefit ChesChem would receive by moving its manufacturing operations to Tilsen is lower energy costs
ChesChem will not move its manufacturing operations to Tilsen unless the price of natural gas in Chester increases
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