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GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2506
Given Kudos: 1055
GPA: 3.39
In the last year, real estate prices, such as those for hous
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Updated on: 11 Jul 2021, 23:34
Updated on: 11 Jul 2021, 23:34
Expert Reply
Question 1
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Question Stats:
57% (02:32) correct
43% (01:35) wrong based on 14 sessions
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In the last year, real estate prices, such as those for houses and condominiums, have gone up an average of 7% in the city of Galway but only 2% in the town of Tuam. On the other hand, average rents for apartments have risen 8% in Tuam over the last year, but only 4% in Galway.
Which of the following is an inference that can be reasonably drawn from the premises given above?
(A) In the last year, the ratio of average apartment rents to average real estate prices has increased in Tuam but fallen in Galway.
(B) Tuam has experienced a greater shift in demand toward the rental market than Galway has.
(C) It has become easier for Galway real estate to be bought and sold, whereas it has become easier for Tuam real estate to be rented.
(D)The supply of rental apartment units has decreased more in Tuam than in Galway.
(E) The average amount spent on housing is higher in Galway than it is in Tuam.
Originally posted by GeminiHeat on 08 Nov 2019, 10:14.
Last edited by GeminiHeat on 11 Jul 2021, 23:34, edited 1 time in total.
Last edited by GeminiHeat on 11 Jul 2021, 23:34, edited 1 time in total.
Formatted
Re: In the last year, real estate prices, such as those for hous
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08 Nov 2019, 11:27
08 Nov 2019, 11:27
1
Expert Reply
To be honest I am always skeptical of such a question provided by NON-official resources.
Relating the real estate price with the rent where the variable which would come into play would be several, makes me perplexing.
It is like to make a ratio between fruit and vegetables which are two distinct things.
Perhaps, that is me.
Relating the real estate price with the rent where the variable which would come into play would be several, makes me perplexing.
It is like to make a ratio between fruit and vegetables which are two distinct things.
Perhaps, that is me.
Manager
Joined: 20 Jun 2019
Posts: 181
Given Kudos: 41
GRE 1: Q160 V161
GRE 2: Q165 V159
Re: In the last year, real estate prices, such as those for hous
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19 Feb 2020, 05:54
19 Feb 2020, 05:54
2
We know two things. Prices for real estate went up 7% in G and 2% in T. Also average rent went up 8% in T and 4% in G.
A- Now ratio of average apartment rents to average real estate prices means rent/prices. For G this means 7% increase in denominator and 4% increase in numerator. Ratio will decrease. Whereas there is 8% increase in numerator and 2% increase in denominator for T which means ratio will increase. Correct.
B- We can not say for sure demand has been affected. Could be other factors like supply. Incorrect.
C- Increase/decrease in rent can not be extrapolated towards ease of renting. Similar for buying/selling real estate. Incorrect.
D- Again, like B, we can't say this for sure. Maybe demand is affected. Incorrect.
E- We are only given percentage changes. Can't talk about any averages. Incorrect.
A- Now ratio of average apartment rents to average real estate prices means rent/prices. For G this means 7% increase in denominator and 4% increase in numerator. Ratio will decrease. Whereas there is 8% increase in numerator and 2% increase in denominator for T which means ratio will increase. Correct.
B- We can not say for sure demand has been affected. Could be other factors like supply. Incorrect.
C- Increase/decrease in rent can not be extrapolated towards ease of renting. Similar for buying/selling real estate. Incorrect.
D- Again, like B, we can't say this for sure. Maybe demand is affected. Incorrect.
E- We are only given percentage changes. Can't talk about any averages. Incorrect.
