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Unintended Consequences and Substitution
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GMAT
VR.104 Unintended Consequences and Substitution
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Critical Reasoning stimulus: A state subsidizes efficient air conditioners to reduce summer electricity demand. Which observation would best fit the reasoning pattern of unintended consequences from changed incentives?
A
Some households replace old inefficient units without changing cooling habits.
B
The state verifies model numbers before paying subsidies.
C
Retailers advertise the subsidy during hot weather.
D
Utilities send customers tips about thermostat settings.
E
Households that receive the subsidy cool garages and guest rooms they previously left warm, so peak electricity demand falls less than expected.
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