Economic analysts recognize that markets occasionally struggle to distribute resources effectively, though situations may arise where governmental int...
GMAT Information and Ideas : (Ideas) Questions
Economic analysts recognize that markets occasionally struggle to distribute resources effectively, though situations may arise where governmental interference produces greater damage than the original market dysfunction. Considering this situation and lacking any universal directive for when to intervene, what provides the foundation for regulatory measures initially? Dr. Sarah Chen has suggested a particular approach through highlighting the obligation to safeguard consumer interests: market dysfunctions limit economic options, so regulators should not permit these limitations unless intervention would generate more severe inefficiencies or pursue an inappropriate goal.
Which option most accurately captures the central concept of the passage?
Chen's approach shows that since market dysfunctions occasionally warrant interference and since these dysfunctions restrict options, then regulators possess an unconditional obligation to interfere in every situation.
A potential approach for validating regulatory interference is Chen's contention that safeguarding consumer interests demands measures against market dysfunctions except when interference would generate more severe damage.
Numerous economic analysts acknowledge that interference may occasionally produce more damage than market dysfunctions, yet they lack organized approaches for establishing when interference is suitable, which Chen's approach might help address.
Chen's approach indicates that if our acknowledgment that situations may render interference damaging is correct, then the rationale for any regulatory measures becomes doubtful.
Decode and Map the Passage
Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| "Economic analysts recognize that markets occasionally struggle to distribute resources effectively," |
|
| "though situations may arise where governmental interference produces greater damage than the original market dysfunction." |
|
| "Considering this situation and lacking any universal directive for when to intervene, what provides the foundation for regulatory measures initially?" |
|
| "Dr. Sarah Chen has suggested a particular approach through highlighting the obligation to safeguard consumer interests:" |
|
| "market dysfunctions limit economic options, so regulators should not permit these limitations unless intervention would generate more severe inefficiencies or pursue an inappropriate goal." |
|
Passage Architecture & Core Elements
Main Point: Dr. Chen proposes that regulatory intervention should be based on protecting consumer interests, allowing intervention against market dysfunctions unless the intervention would cause greater harm.
Argument Flow: The passage establishes that markets sometimes fail but government intervention can be worse, creating a dilemma about when to regulate. It then presents Chen's solution: use consumer protection as the foundation, intervening against market dysfunctions unless doing so would create worse problems or serve the wrong purpose.
Step 1: Interpret the Question Precisely
What's being asked? The central concept of the entire passage
What type of answer do we need? The main idea that ties together all the passage's components
Any limiting keywords? "Most accurately captures" - we need precision, not just a partially correct idea
Step 2: Prethink the Answer
- The right answer needs to capture that this passage is fundamentally about Chen's approach to regulatory decision-making
- It should include: Chen's consumer protection foundation, the idea that intervention is warranted against market dysfunctions, and the exception that intervention shouldn't happen if it would cause more harm
Chen's approach shows that since market dysfunctions occasionally warrant interference and since these dysfunctions restrict options, then regulators possess an unconditional obligation to interfere in every situation.
✗ Incorrect
- Claims Chen gives regulators an "unconditional obligation to interfere in every situation" which directly contradicts Chen's approach that explicitly includes exceptions
A potential approach for validating regulatory interference is Chen's contention that safeguarding consumer interests demands measures against market dysfunctions except when interference would generate more severe damage.
✓ Correct
- Captures Chen's consumer protection foundation and includes both the general principle and the key exception, matching our prethinking perfectly
Numerous economic analysts acknowledge that interference may occasionally produce more damage than market dysfunctions, yet they lack organized approaches for establishing when interference is suitable, which Chen's approach might help address.
✗ Incorrect
- Focuses on the general problem rather than Chen's specific solution, treating Chen's approach as potentially helpful rather than as the main focus
Chen's approach indicates that if our acknowledgment that situations may render interference damaging is correct, then the rationale for any regulatory measures becomes doubtful.
✗ Incorrect
- Suggests Chen's approach makes all regulatory rationale "doubtful" which misrepresents her position of providing criteria for justified regulation