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CR: prohibitionland
VivekjhaMBA
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The people of Prohibitionland are considering banning the service of alcoholic beverages in restaurants to curb unruly behavior on the part of its residents. Proprietors of restaurants in Prohibitionland are protesting the ban on the grounds that it will reduce their revenues and profits. However, several provinces in Prohibitionland enacted restrictions on alcoholic beverages last year, and the sales taxes paid by the restaurants in those provinces rose by an average of 50 percent. In contrast, the sales taxes paid by restaurants located in areas of Prohibitionland that did not have any restrictions rose by an average of 30 percent.

Which of the following, if true, supports the restaurant proprietors’ economic stance against the ban?
A In the provinces that restricted alcoholic beverages, there was a short-term negative impact on restaurant visitation in the beginning of last year.

B The sales tax in Prohibitionland is lower on food and beverages than it is on other consumer goods, such as clothing.

C The consumption of alcoholic beverages in Prohibitionland has been on a gradual decline the last 20 years.

D The restrictions on alcoholic beverages enacted last year allowed for the service of drinks beginning around dinnertime each evening.

E Overall sales tax revenue did not increase at a substantially higher rate in the provinces that enacted the restrictions on alcoholic beverages than in the rest of Prohibitionland last year.

I saw this question in one of the tests of manhattan..i am not able to follow the explanation..can anyone please explain?

thanks
Stacey Koprince
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consider ban serving alcohol in restaurants
b/c want to stop bad behavior
restaurant owners don't want to
b/c they say it will reduce revenues and profits
BUT last year some provinces did enact restrictions (just restrictions though - maybe not an outright ban, as is being considered above?)
result: those restaurants that did have the restrictions paid 50% more in sales tax after the restrictions were put in place (implication: so they were selling a lot anyway?)
restaurants that didn't have restrictions only had sales tax increase of 30% (implication: so their business didn't grow as much as the ones that did have the restriction? So the restaurant owners who don't want the ban should actually want it b/c somehow it will help business? By the way, maybe the reason the other group pulled in more sales taxes was because the tax rate went up, not because they sold more.)

The stuff in parentheses above = my own thoughts as I read the argument, based on what the author is saying. That stuff is not stated in the argument.

What supports the people who don't want the alcohol ban?
- Right now, the author is claiming that the areas with restrictions (last year) actually did better than the areas without restrictions; by that reasoning, the restaurant owners should want the ban. So somehow we have to tear down the idea that the ban would be better for the restaurants, not worse.

(A) at the beginning of the year, there was a negative impact based on the restrictions, but it was only short-term.
- this doesn't help the restaurant owners to make the case that there shouldn't be a ban - the negative effects were only short-term

(B) Sales tax on other consumer goods = out of scope. We're trying to figure out whether an alcohol ban will hurt business for restaurants.

(C) fewer people are drinking alcohol
- If not many people drink it, then the restaurant owners wouldn't care as much about banning it.

(D) restrictions last year still allowed alcohol to be served at dinner and at night
- oh, so the restrictions last year weren't an outright ban? Then dismissing the problem by saying the restrictions didn't hurt business means nothing - a ban is a much more extreme situation. Maybe most people drink at night and that's why last year's restrictions didn't hurt business, but it would hurt business greatly from now on if people can't drink at night.

(E) the restriction areas didn't suddenly have the sales tax rate increase a lot last year compared to the non-restriction areas.
- so the discrepancy in sales tax revenues wasn't due to any disparity in sales tax rates in the region. It was about equal for both. That still leaves the author's claim that the restricted areas did better than the non-restricted areas, so why are the restaurant owners complaining about a ban?
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