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PrepTest 73, Logical Reasoning 1, Question 4


Question four, when a question asks for a principle that something conforms to, we call that a principle application question. And on these questions, your job is to make sure you understand the principle and then apply it to the answer choices in order to find a match. Basically, one of the answer choices will match whatever the rule you're given says. A lot of these questions involve formal logic and this one is no different.

The principle is given to us right at the beginning after the word principle. If you're the executive of a company and your compensation package is determined by the advice of an external consultant, and if that consultant also has business interests with the company that you manage, then you're likely to be overcompensated. If we were gonna write that rule into formal logic shorthand, it would look something like this.

If your salary comes from someone who has business interests with the company and is an external consultant, then we know you're going to be overcompensated. Any time you write a formal logic rule, make sure you write the contra-positive, which you write by reversing, negating, and then changing the any ands to ors, and any ors to ands. So if we did that here the contra-positive would be, if you're not overcompensated, then your salary isn't determined by someone who has business interest with the company, or it's not determined by an external consultant.

The correct answer is going to match this rule. So we just go to the answers looking for something that does. Answer choice A has a president of Troskco Corporation who is definitely overpaid. If this is gonna match, we need to find out that his salary is determined by an external consultant with business interests. But that's not what it says, it says that he receives in salary and benefits 40 times more than the average employee of Troskco.

In other words, he gets a lot of money. That's not the standard, so it's not our answer. Answer choice B, the president again, he's probably overpaid, but it's not the same standard. Instead of it being the external consultant with business interests, it's someone whose compensation package was determined five years ago when the company's profits were at an all-time high.

That doesn't match our principle. Answer choice C, the president, probably not overpaid, and we can get rid of this immediately, because our rule can only help us determine that people are overcompensated. It can't help us get them off the hook for overcompensation. So C is not the answer.

D, our president is probably overpaid, that's good. The two conditions, they have to determine his compensation by using an external consultant, and they did. And that external consultant has to have business interests, and he does. This is our match, all the pieces match to the rule, so D is our answer. What's wrong with E?

E tells us he's not overpaid, and as we said before, this rule won't help us learn who isn't overpaid, it'll only help us learn who is. So answer choice D was our answer.

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