# Economist: No economic system that is centrally planned can efficiently allocate resources, and efficient allocati...

Sean on September 27, 2018

PT 23, S2, Q25

Can you please diagram this as well as the correct answer? Thank you!

Mehran on October 3, 2018

@smilde11 of course! Let's diagram the stimulus first:

"No economic system that is centrally planned can efficiently allocate resources, . . . "

ESCP ==> not EAR
EAR ==> not ESCP

" . . . and efficient allocation of resources is a necessary condition for achieving a national debt of less than 5 percent of Gross Domestic Product (GDP)."

ND<5%GDP ==> EAR
not EAR ==> not ND<5%GDP

"It follows that any nation with a centrally planned economy has a national debt that is at least 5 percent of GDP."

ESCP ==> not ND<5%GDP

Notice that this is a valid transitive argument:

ESCP ==> not EAR ==> not ND<5%GDP

This is a Parallel Reasoning question so we are looking for the answer choice with the exact same pattern of reasoning.

Let's diagram (B):

"All of the rural districts are free of major air pollution problems because such problems occur only where there is a large concentration of automobiles, and there are no such places in the rural districts."

" . . . such problems [major air pollution problems] occur only where there is a large concentration of automobiles . . ."

P: MAPP ==> LCA
not LCA ==> not MAPP

" . . . there are no such places [large concentration of automobiles] in the rural districts."

P: RD ==> not LCA
LCA ==> not RD

"All of the rural districts are free of major air pollution problems . . . "

C: RD ==> not MAPP
MAPP ==> not RD

Notice that this is also a valid transitive argument:

RD ==> not LCA ==> not MAPP

So (B) would be the correct answer.

Hope that helps! Please let us know if you have any other questions.