Rural Households have more Purchasing Power than do Urban or Suburban Households at the same Income Level

Question: Rural households have more purchasing power than do urban or suburban households at the same income level, since some of the income urban and suburban households use for food and shelter can be used by rural households for other needs.

Which of the following inferences is best supported by the statement made above?

1. The average rural household includes more people than does the urban and suburban household.
2. Rural households have lower food and housing costs than do either urban or suburban households.
3. Suburban households generally have more purchasing power than do either urban or rural households.
4. The median income of urban and suburban households is generally higher than that of rural households.
5. All three types of households spend more of their income on food and housing than on all the other purchases combined.

Answer: B

Explanation: In this is a GMAT critical reasoning question, we have to find the option that is best supported by the statement made in the above passage.

Let’s go through each of the available option and choose the inference that fits the best.

Option A: The average rural household includes more people than does the urban and suburban household.
Option A states that the average rural household has more people than urban and suburban households. Purchasing power is basically a measure of how much you can but with the money in your pocket. It is true that if the purchasing power of a household is more, there will be more people in the family as compared to other households. But this statement does not have to be true in each and every situation. It is possible that one person in a family is earning so much that it has made the purchasing power of the whole family very high and because of this reason, we can not say that purchasing power of a household decides the strength of the family. So, Option A is incorrect.

Option B: Rural households have lower food and housing costs than do either urban or suburban households.
According to Option B, the rural households have lower food and housing costs as compared to urban or suburban households. It can be true as the abundance of food can make the price of food very less. Rural households are spending less on food and shelter. This can be the reason why they have lower food and housing costs than do either urban or suburban households. So, Option B is correct.

Option C: Suburban households generally have more purchasing power than do either urban or rural households.
Option C states that suburban households have more purchasing power as compared to urban or rural households. This statement directly contradicts the above passage. The passage clearly says that rural households have more purchasing power than urban and suburban households. This option is irrelevant to the passage. So, Option C is incorrect.

Option D: The median income of urban and suburban households is generally higher than that of rural households.
According to Option D, the median income of the urban and suburban households is more as compared to the rural households. This statement is irrelevant to the passage and the passage talks about the purchasing powers of different households and not their income levels. The income level remains equal for all the households. So, Option D is incorrect.

Option E: All three types of households spend more of their incomes on food and housing than on all the other purchases combined.
Option E states that all three households spend more of their respective incomes on food and housing than on all the other purchases combined. This option is out of scope as the passage gives us no information on the basis of which we can make this inference. We don’t know how much money the households are spending and in what proportion. So, Option E is incorrect.

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