Q2:
Kernland imposes a high tariff on the export of unprocessed cashew nuts in order to ensure that the nuts are sold to domestic processing plants. If the tariff were lifted and unprocessed cashews were sold at world market prices, more farmers could profit by growing cashews. However, since all the processing plants are in urban areas, removing the tariff would seriously hamper the government’s effort to reduce urban unemployment over the next five years.
Which of the following, if true, most seriously weakens the argument? E
- Some of the by-products of processing cashews are used for manufacturing paints and plastics.
- Other countries in which cashews are processed subsidize their processing plants.
- More people in Kernland are engaged in farming cashews than in processing them.
- Buying unprocessed cashews at lower than world market prices enables cashew processors in Kernland to sell processed nuts at competitive prices.
- A lack of profitable crops is driving an increasing number of small farmers in Kernland off their land and into the cities.
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