Comprehension

The most plausible justification for higher taxes on automobile fuel is that fuel consumption harms the environment and thus adds to the costs of traffic congestion. But the fact that burning fuel creates these ”negative externalities” does not imply that no tax on fuel could ever be too high. Economics is precise about the tax that should, in principle, be levied to deal with negative externalities: the tax on a liter of fuel should be equal to the harm caused by using a liter of fuel. If the tax is more than that, its costs (including the inconvenience to those who would rather have used their cars) will exceed its benefits (including any reduction in congestion and pollution). 

Question: 1

Which of the following best characterizes the function of the phrase, "the tax on a liter of fuel should be equal to the harm caused by a liter of fuel"? (This phrase occurs in the third sentence.)

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When asked about the function of a sentence or phrase, look for a "general to specific" or "claim to evidence" structure. Here, the author moves from a broad economic idea to a precise, practical rule, which is a classic example of applying a general principle.
Updated On: Oct 1, 2025
  • It restates a point made earlier in the passage.
  • It provides the evidence on which a theory is based.
  • It presents a specific application of a general principle.
  • It summarizes a justification with which the author disagrees.
  • It suggests that the benefits of a particular strategy have been overestimated.
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The Correct Option is C

Solution and Explanation

Step 1: Understanding the Concept:
This question asks us to identify the rhetorical function of a specific phrase within the passage's argument. We need to analyze how this phrase relates to the ideas that come before it.
Step 2: Detailed Explanation:
The passage first introduces the general principle of using taxes to deal with "negative externalities." This is a broad economic concept.
The third sentence then becomes more specific: "Economics is precise about the tax that should, in principle, be levied to deal with negative externalities: the tax on a liter of fuel should be equal to the harm caused by using a liter of fuel."
The phrase in question takes the general idea of taxing externalities and applies it directly to the specific case of automobile fuel. It provides a concrete rule for how the general principle should be implemented in this particular context.
Analyzing the Options:
(A) It restates a point made earlier in the passage.
This is incorrect. The earlier points are more general; this phrase introduces a new, more specific idea.
(B) It provides the evidence on which a theory is based.
This is incorrect. The phrase is part of the theory or principle itself, not the empirical evidence supporting it.
(C) It presents a specific application of a general principle.
This is correct. The general principle is how to tax negative externalities, and the phrase describes the specific application to fuel taxes.
(D) It summarizes a justification with which the author disagrees.
This is incorrect. The author presents this as the correct, precise economic view. The author's disagreement is with any tax that is *too high*, not with this principle for setting the tax.
(E) It suggests that the benefits of a particular strategy have been overestimated.
This is incorrect. The phrase is about how to properly calculate the tax, not about whether the benefits of the tax are overestimated.
Step 3: Final Answer:
The phrase serves to apply the general economic principle of taxing negative externalities to the specific context of fuel consumption.
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Question: 2

The word "exceed" appears in the last sentence of the passage. That sentence reads, "If the tax is more than that, its costs (including the inconvenience to those who would rather have used their cars) will exceed its benefits (including any reduction in congestion and pollution)." In the context in which it appears, "exceed" most nearly means

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When testing synonyms in a vocabulary-in-context question, substitute each option into the sentence. The correct answer will preserve the original meaning and logical sense of the sentence without introducing any awkwardness.
Updated On: Oct 1, 2025
  • outstrip
  • magnify
  • delimit
  • offset
  • supplant
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The Correct Option is A

Solution and Explanation

Step 1: Understanding the Concept:
This is a vocabulary-in-context question. We need to find the synonym for "exceed" that best fits the meaning of the final sentence.
Step 2: Detailed Explanation:
The sentence describes a situation where a tax is set too high. In this case, the negative consequences ("costs") of the tax will be greater than the positive consequences ("benefits"). The word "exceed" is used to mean "be greater than" or "surpass."
Analyzing the Options:
(A) outstrip: This word means to move faster than and overtake someone or something, or to surpass. In a comparative context, it means to be greater than or to become larger than. This is a perfect match for the meaning of "exceed" in the sentence.
(B) magnify: This means to make something appear larger than it is. The costs don't magnify the benefits; they are simply larger than them.
(C) delimit: This means to determine the limits or boundaries of something. This does not fit the context.
(D) offset: This means to counteract something by having an opposing force or effect. This is the opposite of the intended meaning.
(E) supplant: This means to supersede and replace. The costs do not replace the benefits; they just outweigh them.
Step 3: Final Answer:
"Outstrip" is the best synonym for "exceed" in this context, as both convey the idea of the costs being greater than the benefits.
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