UPSC Prelims 2014 · CSAT (Paper II): Consider the following statements :According to the passage, an oil company can make greater…
Read the passage
It is easy for the government to control State-owned companies through nods and winks. So what really needs to be done as a first step is to put petrol pricing on a transparent formula — if the price of crude is x and the exchange rate y, then every month or fortnight, the government announces a maximum price of petrol, which anybody can work out from the x and the y. The rule has to be worked out to make sure that the oil-marketing companies can, in general, cover their costs. This will mean that if one company can innovate and cut costs, it will make greater profits. Hence, firms will be more prone to innovate and be efficient under this system. Once the rule is announced, there should be no interference by the government. If this is done for a while, private companies will re-enter this market. And once a sufficient number of them are in the fray, we can remove the rule-based pricing and leave it truly to the market (subject to, of course, the usual regulations of anti-trust and other competition laws).
Consider the following statements :
According to the passage, an oil company can make greater profits, if a transparent formula for petrol pricing is announced every fortnight or month, by
- 1. promoting its sales.
- 2. undertaking innovation.
- 3. cutting costs.
- 4. selling its equity shares at higher prices.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Innovation and cost-cutting raise profits (b). Step 1: find the sentence. "If one company can innovate and cut costs, it will make greater profits." That gives items 2 and 3. Step 2: test the others. Item 1 is wrong: promoting sales is never mentioned; the formula fixes a maximum price, so profit comes from efficiency, not selling more. Item 4 is wrong: share prices are not mentioned at all. So options (a), (c) and (d) fail.
Tip: in "according to the passage" questions, tick only what the text actually says. An item that sounds sensible in real business, like sales promotion, is still wrong if the passage does not mention it.
Answer as per the official UPSC answer key.
Same theme in UPSC Mains
- MAINS UPSC Mains 2024 · GS Paper IV · Q12Dr. Srinivasan is a senior scientist working for a reputed biotechnology company known for its cutting-edge research in pharmaceuticals. Dr. Srinivasan is heading a research team…
- MAINS UPSC Mains 2024 · GS Paper IV · Q7There is a technological company named ABC Incorporated which is the second largest worldwide, situated in the Third World. You are the Chief Executive Officer and…
Related questions from other years
Question : X receives three coins of different denominations : 1, 2, 5, 10 and 20. If the total amount received by X is m, does X receive a coin of denomination 5?
Statement I : m is not a prime number.
Statement II : The sum of the digits of m is greater than 5.
Answer (a) & explanation
Statement II alone is enough; Statement I alone is not (a). Step 1: three different coins from 1, 2, 5, 10, 20 give ten totals. With a 5: 8, 16, 17, 26, 27, 35. Without a 5: 13, 23, 31, 32. Step 2: Statement I (m not prime): 8, 16, 26, 27, 35 have a 5, but 32 (2 + 10 + 20) does not. Mixed answers, so I fails. Step 3: Statement II (digit sum above 5): 8, 16, 17, 26, 27, 35 qualify, and every one has a 5. (13, 23, 31, 32 have digit sums 4, 5, 4, 5.) So II answers "yes". Options (b), (c) and (d) fail.
Tip: when cases are few, list them all. Then check each statement against the full list.
don't assume both statements are needed. Listing all ten cases takes thirty seconds and settles it.
Answer as per the official UPSC answer key.
Read the passage
How is deflation done? Most countries use a method called ‘double deflation’, where input and output prices are deflated separately. Consider a manufacturer importing oil for use in production. If oil prices fall, output prices do not and quantities remain the same, real value added should not change. But if the same deflator is used for inputs and outputs, as in India, it would look as if the manufacturer had become more productive.
Which of the following assumptions is/are valid?
- 1. Deflation strategies can be used to make manufacturers appear to be doing better than they actually are.
- 2. When input and output prices are both deflated against a single input price, it is referred to as ‘double deflation’.
Select the answer using the code given below.
Answer (a) & explanation
Only assumption 1 is valid (a). Step 1: the passage says that using one deflator for inputs and outputs, as in India, makes it "look as if the manufacturer had become more productive". So deflation methods can make firms appear better than they are (1). Step 2: assumption 2 says double deflation means deflating both against a single price. But the passage defines double deflation as deflating inputs and outputs separately. So 2 reverses the definition. Step 3: options (b), (c) and (d) fail.
Tip: check definitions word for word against the passage. Deflating means removing the effect of price changes to find real growth, as in real GDP.
Answer as per the official UPSC answer key.
P, Q, R, S and T are ranked 1 to 5 (not necessarily in that order). The rank of P is 4, the rank of Q is not 5, the rank of R is 1, the rank of S is not 2, the rank of T is not 3. Then which of the following is/are correct?
- I. If the rank of S is 3, then that of T is 2.
- II. If the rank of Q is 3, then that of T is 5.
Select the answer using the code given below.
Answer (d) & explanation
Neither statement is correct (d). Step 1: P = 4 and R = 1 are fixed. Ranks 2, 3 and 5 remain for Q, S and T, with rules: Q is not 5, S is not 2, T is not 3. Step 2: statement I: if S = 3, then Q and T share 2 and 5. Q cannot be 5, so Q = 2 and T = 5, not 2. I is wrong. Step 3: statement II: if Q = 3, then S and T share 2 and 5. S cannot be 2, so S = 5 and T = 2, not 5. II is wrong. Options (a), (b) and (c) fail.
Tip: fix the known ranks first, then apply each "if" condition and let the "not" rules decide the rest. Write the small table on paper.
Answer as per the official UPSC answer key.
How many times does 5 appear in all two-digit positive integers?
Answer (b) & explanation
The digit 5 appears 19 times (b). Step 1: 5 in the tens place: 50, 51, …, 59 = 10 times. Step 2: 5 in the units place: 15, 25, 35, 45, 55, 65, 75, 85, 95 = 9 times (05 is not a two-digit number). Step 3: total = 10 + 9 = 19. The number 55 has two 5s, and both are counted. Option (a), 18, counts 55 once. Options (c) and (d) wrongly add 05 or 5.
Tip: count place by place. The question asks how many times the digit appears, not how many numbers contain it (that would be 18).
Answer as per the official UPSC answer key.