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Question

Difficulty: MediumMethod of Reasoning

Economist: Proponents of the scarcity-rent model claim that the recent spike in commercial real estate lease rates across the central business district was caused by municipal height restrictions on new commercial towers. However, neighboring suburban business corridors that lack any building height limitations experienced an identical rate of lease increases during the exact same period. Furthermore, both the central district and the suburban corridors experienced an influx of venture capital investment targeting regional logistics firms. Thus, the lease spike is attributable to increased capital investment rather than municipal height restrictions.

Which one of the following most accurately describes the method of reasoning used in the economist's argument?

  1. A
    It demonstrates that an opponent's theoretical model is inherently self-contradictory by applying its principles to an extreme hypothetical scenario.
  2. B
    It rejects an empirical claim by attacking the motives and professional competence of the economists who proposed it.
  3. It challenges a proposed causal explanation by showing that the phenomenon occurred in the absence of the alleged cause, and offers an alternative explanation.Answer
  4. D
    It infers that because a regulatory policy was absent in some commercial sectors, the policy is incapable of producing any economic consequences.
  5. E
    It derives a sweeping conclusion about all commercial property markets based solely on the unrepresentative behavior of a single business corridor.

Answer

The argument challenges a proposed causal explanation by showing that the phenomenon occurred in the absence of the alleged cause, and offers an alternative explanation.
The correct response accurately captures both components of the economist's method: first, weakening the scarcity-rent hypothesis by showing that the effect (lease rate increases) took place in suburban corridors where the supposed cause (height restrictions) did not exist; second, supplying an alternative causal mechanism (venture capital investment) that was present in all observed locations.

Step-by-Step Solution

1
Identify the opposing claim and the author's main conclusion.
The opposing claim is that municipal height restrictions caused commercial lease spikes. The author's conclusion is that the spike was caused by capital investment, not height restrictions.
Understanding the precise claim being attacked and defended is essential for evaluating the method of reasoning.
2
Examine how the premises relate to the causal refutation.
The author notes that suburban corridors lacking height restrictions experienced the identical lease increase (effect without cause) and that both regions shared an influx of venture capital.
Analyzing the empirical evidence reveals the structural technique used to dismantle the opposing view.
3
Abstract the logical progression into formal argumentation terms.
The argument operates by disproving a causal link via a control case (absence of cause with presence of effect) and proposing an alternative causal factor common to both cases.
Matching the concrete text to abstract descriptive language is required for Method of Reasoning questions.

Key Concept

Causal Refutation via Absent Cause and Alternative Explanation
Estimated Time:1m 15s
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Topics

Method of Reasoning

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