LSAT 142 – Section 4 – Question 23

LSAT 142 - Section 4 - Question 23

December 2014

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT142 S4 Q23
+LR
Must be false +MBF
PSA - Find or complete the application +PSAa
Conditional Reasoning +CondR
Rule-Application +RuleApp
Kick It Up +KIU
A
4%
159
B
3%
157
C
34%
163
D
6%
158
E
53%
166
153
163
174
 +Hardest 147.564 +SubsectionMedium

The constitution of Country F requires that whenever the government sells a state-owned entity, it must sell that entity for the highest price it can command on the open market. The constitution also requires that whenever the government sells a state-owned entity, it must ensure that citizens of Country F will have majority ownership of the resulting company for at least one year after the sale.

Summary
The stimulus can be diagrammed as follows:

Notable Valid Inferences
If the citizens will not have majority ownership for at least one year, then the government should not sell.

If the government is not selling for the highest price on an open market, then it should not sell.

A
The government will sell StateAir, a state-owned airline. The highest bid received was from a corporation that was owned entirely by citizens of Country F when the bid was received. Shortly after the bid was received, however, noncitizens purchased a minority share in the corporation.
This is consistent with the requirements. The corporation in question offered the highest bid for the state-owned airline, and even after noncitizens purchase the share, citizens will still have majority ownership of the company.
B
The government has agreed to sell National Silver, a state-owned mine, to a corporation. Although citizens of Country F have majority ownership of the corporation, most of the corporation’s operations and sales take place in other countries.
This could be consistent with the requirements. This condition meets the requirement of citizens having majority ownership, but we don’t know whether or not the requirement of selling for the highest price was violated.
C
The government will sell PetroNat, a state-owned oil company. World Oil Company has made one of the highest offers for PetroNat, but World Oil’s ownership structure is so complex that the government cannot determine whether citizens of Country F have majority ownership.
This could be consistent with the requirements. It is possible that “one of the highest” means the highest offer, and since the government “cannot determine” if the citizens have majority ownership, we cannot confirm that one of the requirements was violated.
D
The government will sell National Telephone, a state-owned utility. The highest bid received was from a company in which citizens of Country F have majority ownership but noncitizens own a minority share. However, the second-highest bid, from a consortium of investors all of whom are citizens of Country F, was almost as high as the highest bid.
This is consistent with the requirements. The government got the highest bid from a company in which the citizens have majority ownership.
E
The government will sell StateRail, a state-owned railway. The government must place significant restrictions on who can purchase StateRail to ensure that citizens of Country F will gain majority ownership. However, any such restrictions will reduce the price the government receives for StateRail.
This would violate one of the requirements. In this situation, it is impossible to simultaneously meet both of the necessary conditions of selling. If the requirement about citizen ownership is met, the requirement about selling for the highest price must be violated.

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LSAT PrepTest 142 Explanations

Section 1 - Logical Reasoning

Section 2 - Logical Reasoning

Section 3 - Reading Comprehension

Section 4 - Logical Reasoning

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