GMAT Reading Comprehension: Specific Detail and Inference

For decades, agricultural economists treated smallholder coffee farmers in the highlands of northern Tanzania as price-takers, assuming that international commodity prices fully determined the income volatility these farmers experienced. A 2017 study by Marta Reyes and colleagues complicated this picture. Tracking 412 farms over six harvest cycles, the researchers found that within-village variation in net income exceeded between-village variation by a factor of nearly three, even when farms shared a single buying cooperative and identical posted prices. Reyes attributed most of the within-village spread to differences in the timing of harvest sales: farmers who could afford to delay sales until the second quarter of the marketing year captured premiums that early sellers could not. Reyes was careful to note that the dataset included only cooperative members and excluded the roughly 20 percent of regional growers who sold to independent traders, whose pricing dynamics the team did not examine. She suggested that further work on independent-trader channels might either confirm or qualify the timing effect she had identified.

The passage suggests which of the following about the farmers studied by Reyes and colleagues?

• A Their net incomes were determined primarily by international commodity prices rather than by local factors.
• B Those who delayed selling their harvests tended to receive higher prices than those who sold earlier in the marketing year. ✓ Correct
• C Most farmers who sold to independent traders earned more than cooperative members did over the six harvest cycles.
• D The timing of harvest sales is the single most important determinant of income for all smallholder coffee farmers in northern Tanzania.
• E Cooperative membership eliminated income volatility that would otherwise have been driven by international price swings.

In 2019, the city of Brennholt began retrofitting its older municipal buildings with phase-change thermal storage panels, a technology that absorbs heat during the day and releases it at night. City engineers reported that energy costs in the seven retrofitted buildings fell by an average of 14 percent in the first full year after installation, with the largest savings concentrated in buildings whose original insulation had been replaced within the previous decade. Two of the seven buildings, however, showed no measurable savings; both had heating systems that pre-dated 1985 and operated on schedules that the new panels could not coordinate with. The city's procurement office has proposed extending the retrofit program to 30 additional buildings by 2027, citing the average savings figure. A consulting firm hired to evaluate the proposal cautioned that the buildings selected for the initial round had been deliberately chosen because their thermal profiles were considered favorable, and that buildings outside this profile might respond differently.

According to the passage, what did the consulting firm caution about the city's proposal?

• A The 14 percent average savings figure was calculated incorrectly by the city's engineers.
• B The buildings in the initial round were chosen because their thermal profiles were favorable, and other buildings might respond differently. ✓ Correct
• C Two of the seven retrofitted buildings showed no measurable savings because of outdated heating systems.
• D Phase-change thermal storage panels are unlikely to produce meaningful savings in any building constructed before 1985.
• E Extending the retrofit program to 30 additional buildings by 2027 will not be cost-effective for the city.

Historians of early twentieth-century retail have long debated the role of mail-order catalogues in shaping consumer expectations in rural North America. A recent monograph by Fei Liu argues that the catalogues' most lasting influence lay not in the goods they sold but in the standardized return policies they popularized. Liu shows that before 1908, fewer than 10 percent of rural general stores accepted returns of non-defective merchandise, while by 1925 a clear majority did so, often using language borrowed almost verbatim from catalogue guarantees. Liu acknowledges that her evidence is drawn primarily from store records in three Midwestern states and that comparable records from the Pacific Northwest, where catalogue penetration was lower, have not yet been systematically examined. She speculates that a similar but slower shift may have occurred in regions with weaker catalogue presence, but she stops short of claiming that the catalogues alone caused the change, noting that contemporaneous shifts in commercial law could also have contributed.

The passage suggests that Liu would most likely agree with which of the following statements?

• A Mail-order catalogues were the sole cause of the shift in return policies among rural general stores between 1908 and 1925.
• B Rural general stores in the Pacific Northwest adopted catalogue-style return policies more rapidly than stores in the Midwest.
• C Factors other than mail-order catalogues may have contributed to the change in return policies during the period she studied. ✓ Correct
• D The standardization of return policies had a greater influence on rural consumers than the goods sold through mail-order catalogues did.
• E By 1925, virtually every rural general store in North America accepted returns of non-defective merchandise.