Multiple choice

Noplasticland uses its limited foreign-exchange resources to buy plastic chips abroad for recycling into plastic products. Although the products thus manufactured earn more foreign exchange than the cost of buying the chips, that course is ill-advised. Noplasticland’s own territory has vast petroleum reserves, which can be extracted without spending almost any foreign exchange. Which of the following, if true, provides the strongest support for Noplasticland’s policy of buying plastic chips abroad?

  1. The price of plastic chips on international markets rose significantly in 2003.

  2. Noplasticland’s foreign-exchange resources dropped significantly in 2003.

  3. There is virtually no difference in quality between the plastic products manufactured from plastic chips and those manufactured from plastic obtained by extracting petroleum.

  4. Plastic chips are used in manufacturing roughly half the plastic products in the world today, and experts predict that plastic chips will be used even more extensively in the future.

  5. Facilities that process plastic chips can be built and operated in Noplasticland with substantially less foreign exchange expenditure than can provide facilities to process plastic obtained by extracting petroleum.

Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The objective of the policy being pursued is saving scarce foreign exchange. So if what is stated in the option (5) is true then we can confidently say that the policy being pursued by Noplasticland is more optimal in meeting its objective of saving foreign exchange than the alternative suggested. Hence option (5) is correct.