16Hit1600
Information and IdeasVery hardRecognizing a market-wide trend that undercuts attribution

Information and Ideas practice question

Dev Rao runs the food truck Tres Hermanos. In March 2023 he stopped buying beef and produce at a retail grocery and began buying the same items from a wholesale supplier across town. Over the next three months his ingredient cost per taco fell from $1.34 to $1.16, and his margin on each taco widened accordingly. Rao attributes the entire 18-cent decline to the change in supplier, and he now advises other truck owners to make the same switch.

Which finding, if true, would most directly weaken Rao's explanation of the 18-cent decline?

  1. A. Rao now spends about 90 minutes each week driving to and from the wholesale supplier.
  2. B. Between March and June 2023, prices for beef and produce at Rao's former retail grocery fell by an amount that would have brought his cost per taco to about $1.17.Correct
  3. C. Rao's total monthly spending on ingredients was higher in June 2023 than in March 2023 because he sold more tacos.
  4. D. Two other food trucks that began buying from the same wholesale supplier in 2023 saw their ingredient cost per taco fall by about 15 cents.

Answer: B. Between March and June 2023, prices for beef and produce at Rao's former retail grocery fell by an amount that would have brought his cost per taco to about $1.17.

Rao claims the supplier switch caused the decline, so the strongest weakener shows that the decline would have occurred anyway. Choice B does this: had Rao stayed at the grocery, his cost per taco would have fallen to roughly $1.17, nearly the whole 18-cent drop, so the switch explains almost none of it. Choice A is the error of confusing a different kind of cost (Rao's time and fuel) with the ingredient cost per taco the claim is about; it may reduce the benefit of switching but says nothing about what caused the 18-cent drop. Choice C is the per-unit versus total error: a rise in total spending driven by greater sales volume is fully compatible with a lower cost per taco. Choice D would strengthen rather than weaken the claim, since it shows a similar per-taco drop in other trucks that made the same switch.

Why the other answers are wrong

A. Rao now spends about 90 minutes each week driving to and from the wholesale supplier.
Driving time and fuel are a different kind of cost from ingredient cost per taco; this might make switching less worthwhile overall but says nothing about what caused the 18-cent drop.
C. Rao's total monthly spending on ingredients was higher in June 2023 than in March 2023 because he sold more tacos.
Total spending rising because he sold more tacos is entirely consistent with a lower cost per taco — watch the difference between per-unit and total figures.
D. Two other food trucks that began buying from the same wholesale supplier in 2023 saw their ingredient cost per taco fall by about 15 cents.
A similar 15-cent per-taco drop at other trucks that made the same switch supports Rao's claim; the question asks you to weaken it.

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