Flawed ReasoningDiff: Hardest

Logic Breakdown

Passage Summary: The author argues that because a family-run business can pay its own members very little, it will have lower costs and higher profits, making it the best way for that family to get rich.

Conclusion: A family business represents the most reliable path for a family to achieve financial success.

Reasoning: Because family members can be paid very low wages, the business reduces its operating costs and increases its profits.

Analysis: The argument suffers from a glaring oversight regarding where that 'profit' actually goes. While the business entity might look wealthy on paper due to low wage expenses, the family members—who are the employees—are the ones suffering those low wages, which might negate the overall financial benefit to the family unit. Furthermore, the author leaps from 'higher profits' to the 'surest road' to prosperity without considering any other investment or career paths. Look for an answer that identifies this failure to consider the net financial position of the family as a whole.

Passage Stimulus

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17.

The reasoning in the argument is flawed because the argument

Correct Answer
C
It identifies the core gap: lower wages paid to family members could reduce the family’s prosperity, so higher business profits don’t automatically mean the family is better off. This directly undercuts the move from firm profit to family prosperity.
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