The constitution of Country F requires that whenever the government sells a state-owned entity, it must sell that ent...

Mehran on February 3, 2016

@Romans this is a Cannot Be True question as we are being asked to identify the situation that would cause Country F to violate at least one of the constitutional requirements.

So we are looking for an answer choice that conflicts with one of the constitutional requirements.

The first sentence of the stimulus sets forth the following constitutional requirement:

"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."

"Whenever" introduces a sufficient condition, so this sentence would be diagrammed as follows:

SSOE ==> HP
not HP ==> not SSOE

We are then told, "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."

Again, "whenever" introduces a sufficient condition, so this sentence would be diagrammed as follows:

SSOE ==> FMO at least 1yr
not FMO at least 1yr ==> not SSOE

(E) sets forth the following situation:

"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."

Notice here the government is selling a state-owned entity, i.e. StateRail. So this would invoke the sufficient condition of the first constitutional requirement above.

This means that the government must sell StateRail for the highest price it can command on the open market.

In (E), however, the government must place significant restrictions on who can purchase StateRail (to comply with the other constitutional provision regarding majority ownership by citizens of Country F) and these restrictions will reduce the price the government receives for StateRail, i.e. the government is NOT selling StateRail for the highest price it can command on the open market.

Or the government sells it for the highest price (i.e. does not place significant restrictions) to comply with the first constitutional requirement which means that the government cannot ensure that citizens of Country F will gain majority ownership.

So in (E), either the government will not sell for the highest price or foreigners will own the majority of StateRail.

The problem with (C) is that it does not necessarily conflict.

We only know that World Oil Company has made one of the highest offers (we don't know if it was the highest) and that the government cannot determine whether citizens of Country F have majority ownership (we do not know for sure if the second principle has been violated). As such, it is possible that (C) could be true.

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