Statement: "The government plans to reduce the import duty on electronics."

Question

Statement: "The government plans to reduce the import duty on electronics."

Conclusions:

I. Prices of electronics may fall.

II. Domestic production of electronics will stop.

1. A. Only I follows (Correct answer)
2. B. Only II follows
3. C. Both follow
4. D. Neither follows

Correct Answer

Option A — A

Detailed Solution & Explanation

The correct answer is Option A.

Key Points

• Statement: the government plans to reduce import duty on electronics.
• Conclusion I (prices may fall): follows — lower import duty reduces landed cost, so retail prices *may* fall. The cautious word 'may' makes it a reasonable inference.
• Conclusion II (domestic production will stop): does not follow — this is an extreme, unsupported leap. A duty cut does not force domestic production to halt.
• So only I follows.

Exam Tip

• in 'conclusions' reasoning, reject options with extreme words (will stop, never, always); accept moderate, directly-supported inferences (may fall, is likely).

Additional Information

• In statement-and-conclusion questions, a conclusion must follow directly and necessarily — not merely be plausible or economically likely.
• Reject conclusions that require an extra assumption, and reject those that restate the statement without adding anything.
• Beware of extreme words (*all*, *never*, *only*) in conclusions; they usually overreach what the statement supports.