Verbal Practice Exercise-07

Resolve the Paradox:

3D printers, printers making an object using a computer 3D file, use inferior materials, have higher tolerances, and produce an output that does not have the fit and finish of a product made by regular methods such as by using injection molding machines. Yet the profit per unit part for a part made by 3D printer is much higher than the corresponding profit per unit part for a part made by injection molding machines.

1. Which of the following resolves the paradox above? (Indicate all that apply)

I. 3D printers can make custom parts in extremely small quantities at a much smaller cost per part than injection molding machines do.

II. The cost of electricity, one of the main costs for running printers and machines has been going up during the past decade.

III. The products manufactured by 3D printers are usually sold to end customers while the products manufactured by injection molded printers are sold to Original Equipment Manufacturers (OEMs).

IV. Injection molding machines make product in large batches while 3D printers make products in much smaller quantities.

V. Products made from 3D printers fetch higher prices because the designs of products can be customized to customer requirements. Products made using injection molding printers lack this capability.

In principle, gross margin, the difference between the customer sales price of the product and the cost to manufacture the product, on a product is directly proportional to the R&D investment the company makes. However, the same does not hold true with Nokia and Apple, who compete in the cell phone market. Nokia spends 3 times on R&D as much as Apple does but earns substantially lower average gross margins on product sales.

2. Which of the following resolves the stated paradox above?

A. Nokia spreads the R&D across multiple product lines, whereas Apple sells its products only in one product line, the one with the highest margins.

B. Apple uses more contractors than Nokia does for production.

C. Nokia pays its engineers about the same as Apple does, but provides them with better benefits

D. Apple sells direct and therefore has lower sales overhead than Nokia does on products.

E. Nokia’s CEO’s pay is higher than that of Apple’s CEO.

Doctor’s often argue that people who live in relatively germ free environments contract fewer germs and consequently fall sick less frequently. However, a recent survey of 1000 households revealed a shocking contrast. Children, 3 years and above living in houses that are dis-infected twice a week fell sick as frequently as those who live in houses that are dis-infected once a quarter.

3. Which of the following resolves the paradox above? (Indicate all that apply)

I. Kids living in houses that are disinfected twice a week interact at school with children whose houses may not be disinfected as frequently.

II. Kids who live in houses with germs do not eat foods that enable development of an immune system that is resistant to these germs whereas kids who essentially live in germ-free houses have a much stronger immune system.

III. Resistance to germs is dependent on both genes of an individual and the amount and kind of germs that that one gets in contact with.

IV. Some kids who are fed well during their childhood develop resistance to germs faster than kids who are not fed mother’s milk.

V. Kids who live in houses that are not disinfected as frequently learn to keep themselves free of germs through activities such washing hands more frequently whereas kids who live in cleaner houses don’t learn such skills.

Barring the last 500 years, the world’s population has essentially had a disjointed existence with major civilizations hardly interacting with one another. Even in the absence of any such interaction, changes in world’s GDP or gross domestic product, a measure of total value of products and goods produced, show very consistent behavior in that GDP of world civilizations rose or fell approximately simultaneously over a period of last 10,000 years.

4. Which of the hypothesis, if true, would explain the simultaneous rise and fall of GDP across the world civilizations?

A. Even though the GDP of world civilizations rose and fell in approximately the same time periods, the actual value of goods produced by each of the civilizations varied considerably.

B. While world trade was virtually non-existent 2000 years ago, there is evidence that there was increasing interaction between neighboring civilizations starting in the fifth century in/ A.D

C. Improvements in technology have been the most telling factor impacting GDP changes, and historians have shown that technology cycles have unraveled incredibly consistently across human civilizations throughout the human.

D. Discovery of the wheel that kicked off the first significant use of the technology and probably the first documented improvement in GDP was unraveled approximately 10,000 years across all the civilizations.

E. One of the reasons for the fall in GDP has been natural disasters such as volcano eruptions or earthquakes, which at times have impacted several civilizations simultaneously.

In order to increase sales of stores, Wal-Mart stores started carrying products in new product categories such as clothing and jewelry. However, one month after Wal-Mart introduced some new product categories, the sales per store decreased.

5. Which of the following resolves the apparent discrepancy above? (Indicate all that apply)

I. Wal-Mart moved existing products as it added new product categories and shoppers found it extremely difficult to locate the products that they wanted to purchase.

II. To make room for more products, Wal-Mart decreased the variety of products in existing product categories thereby eliminating some quite sought after products.

III. The new product categories required consultative sales and Walmart did not train its store executives on consultative sales strategies.

IV. The economic boom entered its next stage last month with the un-employment numbers hitting record lows.

V. P&G, one of Walmart’s key supplier, released several new products last month.

McDonald’s and Denny’s recently introduced new breakfast offerings. Although Denny’s offerings scored higher marks from critics, McDonald’s revenue during the breakfast hours (5 am to 9 am) increased by 20% while Denny’s essentially remained same.

6. Which of the following would explain the apparent paradox above?

A. McDonald’s offerings were more reasonably priced than Denny’s offerings.

B. Since Denny’s is the only restaurant that serves breakfast 24 hours a day, its new offerings were geared more towards the midnight customer.

C. McDonald has attracted a disproportionate share of lunch customers since it started pairing Green Mountain Coffee with its breakfast offerings.

D. In response to the food price inflation, McDonald recently raised the sales price of some of its lunch offerings.

E. McDonald spends more money on advertising than Denny’s does.

In order to attract renters, Park Centrum provided washing machines in every apartment (personal washers) and in the common area (common washers). The owner argued that most renters would prefer to use the common washers since these machines take on larger loads, do not cost customers any electricity, and provide free washing and drying supplies. Also these machines were expected to be used more frequently as one machine may be used by several tenants. Ten years later, the owner was surprised to find out that personal washers had as many service calls per machine as common washers did.

7. Which of the following, if true, explain the discrepancy above? (Indicate all that apply)

I. Owners who had kids, preferred to wash kid’s clothes in their apartments but used Common Washers for washing large loads.

II. The machines installed in the apartments were standard consumer grade machines with a lower average service interval than the industrial washers that were installed in the common area.

III. Over the past 10 years, the average salary secured and the average rent paid by the tenants of the building has gone up steadily.

IV. The few apartments in the building that had much lower occupancy than average had fewer service calls for personal washers

V. The personal washers were supplied with hard water that accelerated the corrosion of its internal bearings while the machines in the common area used soft water and corrosion resistant detergent.

Proponents of proprietary software have often argued that while open source software may have lower or no upfront licensing cost, in the longer run, open source software would always end up costing more per employee due to higher support costs.

A study done by National Small Business Institute (NSBI) compared 2 companies, one which used open source software, and the other which used proprietary software to run their respective business operations. The study found that the company that used the open source software had lower overall costs.

8. Before releasing the surprising results, the NSBI wanted to ensure the validity of the results. Which of the following studies would you recommend the NSBI undertake?

A. Did any of the companies use both open source and proprietary technologies?

B. Did the employees of company that used open source software prefer to use the proprietary software?

C. Is the company using open source software more profitable than the company using proprietary software?

D. Has the study been conducted over a duration long enough to filter out the impact of one time events that would impact open or proprietary software’s runtime costs?

E. Did both open source and proprietary software provide same uptime and stability during the course of the study?

Taking a step towards going green, last year the state of Wississipi planned on giving interest free loans and free installations for households installing solar power generators. Many houses in Wississipi took advantage of this and a report claimed that up to 10% of households in the state were benefitting from the scheme. But at the end of the year the state saw an increase in the demand for electricity.

9. Which of the following, if true, does most to explain the result that followed the implementation of the scheme?

A. During an internal audit it was proved that the claims of the report was not entirely true and had been slightly modified.

B. Last year, the sunlight hours were comparatively fewer than the year before.

C. Most people were not committed towards going green and thus did not take advantage of the scheme.

D. Many people who benefited from the scheme wasted most of the energy they got from solar generators in unwanted uses they might have avoided if solar energy had not been available in the first place.

E. Many new manufacturing plants that use lot of electricity started their operations in Wississipi towards the end of last year.

Food and Drug Association (FDA) released a warning stating the presence of Salmonella in tomatoes. But this had little or no effect on the consumers using tomatoes. However, in September, a month after the warning was issued, sales of tomatoes fell sharply.

10. Which of the following, if true, best explains the reason for the evident incongruity described above?

A. When opinions got out that only minute traces of Salmonella were present in tomatoes, most people did not heed to the FDA warnings.

B. There were more than 3 such warnings in August and September and this made the consumers ignore all FDA warnings.

C. In September, because of the multiple protests by various public health organizations many grocers were forced to refrain from selling tomatoes.

D. The warning was not publicized in internet where it would have got the most attention of customers.

E. The warning against pepper and other vegetables containing salmonella was not released until late September.

The average size of a living organism on a planet is inversely proportional to the gravitational force exerted on the organism. This implies, that larger planets, which have the largest gravitational force, will have the smallest size of organisms. However, a recent study concluded that Juniper, one of the larger planets with a large gravitational force, if habitable, would create an ecosystem that would breed extremely large organisms.

11. Which statement below best explains the contrast above?

A. Calcium deposits found in the water of Juniper will lead to stronger bones of the organisms.

B. Tenzing, a planet 5% larger than Juniper, has shown evidence of supporting extremely large organisms.

C. Juniper is covered with nitrogen, the primary content in fertilizer, and hence will support growth of rich flora.

D. Since Juniper is completely covered in water, the buoyant force of water will counter the gravitational force therefore reducing the overall gravitational force in the organism and hence will create an environment to support habitat for larger organisms.

E. Scientists claim that Juniper will support growth of smallest 4-legged micro-organism ever seen.

Two years ago, government of Lexington offered subsidies in fertilizers to help farmers improve the yield on crops. Even though, the amount of fertilizers utilized increased by 40%, the yield of crops has not improved.

12. Which of the choices below help explain the lack of improvement in the yield of crops?

A. Most farmers buy fertilizers from government authorized sources.

B. There has been little improvement in the quality of fertilizers over the last decade.

C. Most crops require more water when fertilized more. Lexington has a limited supply of water for irrigation that has not changed over the last decade.

D. The yield of crops on an average in Lexington is higher than the yield of crops in the neighboring countries.

E. Lexington’s produce of whole grain wheat has doubled since the government introduced the subsidy.

Plan: A careful study by GM engineering has concluded that the high rejection rate at the end of the assembly line is caused by the variance in the car subsystems supplied by its partners. Therefore to reduce the rejection rate from 5% to 1%, GM has instituted a plan to reduce the tolerance from 5% to 1% for all its subsystems.

Result: The rejection rate has reduced to 4%.

13. What additional information will throw light on the reason that the rejection rate reduced only to 4% instead of the planned 1%?

A. Some GM models contain subsystems manufactured entirely by GM and not sourced from any external supplier.

B. The models that have highest rejection rate also have the maximum number of subsystems manufactured by GM’s partners.

C. The reduced tolerances have increased the lead times from GM’s suppliers

D. Majority of the rejections are caused by an essential subsystem from one particular partner who is still in the process of implementing the tighter tolerances.

E. The peak in rejection rate coincided with the peak in production at GM factories.

For the past two years, Torida state mango farmers have been seeing increased ceroplastes rubens infestation of kensington mangoes. Since this infestation negatively impacts the taste of the mangoes, the farmers are experiencing a dip in the sales of mangoes. In order to increase the sales, Torida mango farmer’s association decided to increase its use of pesticides last year. Nevertheless, farmers saw a bigger dip in sales this year.

14. Which of the following, if true, most helps to explain why the association’s decision failed to achieve its goal?

A. In order to avoid the harmful side effects of pesticides, many mango lovers did not buy Kensington mangoes from Torida.

B. The use of more pesticides led to increase in the expenditure to the farmers

C. Some of the other states in US had also followed the decision taken by Torida farmer’s association.

D. Some of Torida farmers started cultivating Madame Francis variety of mangoes last year.

E. Torida farmer’s association did not back its farmers with enough loan this year.

The unemployment rate, which is obtained from a separate household survey, fell to 9.0% last month signaling that 700K more people were employed. Yet, another study by the government stated that non-farm payrolls rose only by 50K.

15. Which of the following best settles the dichotomy presented in the passage above?

Governments of a few states are in the process of shedding jobs that have not reflected on the unemployment rate.

Because of bad weather, a number of people got temporary jobs and did not report as unemployed.

About 75% of the job positions in companies are filled through references and not made public.

International corporations have stepped up hiring for their subsidies in US.

The unemployment rate is the national benchmark on which the economic policy is decided and is considered the most accurate estimate.

Answer Sheet:

1. I & V
2. A
3. I & V
4. C
5. I & II
6. B
7. II & V
8. D
9. E
10. C
11. D
12. C
13. D
14. A
15. B