"Wizard" industries are characterized by

Question

Option 1: a slower rate of market capitalization growth.

Option 2: a higher concentration of economic profit and research and development.

Option 3: a reliance on traditional economic rules and practices.

Option 4: lower research and development spending.

AfterBoards · Accepted Answer

**From passage:** "The economic profit, which is the profit you make minus the cost for the capital you employ is in the wizard industries. It's where R&D happens; they're two times more R&D intensive." Chris directly says: wizard industries have economic profit -> they're also "two times more R&D intensive" -> so wizards = high profit + high R&D! Also remember from earlier: wizards "hog 45 percent of the growth in market cap" -> so they have high growth, not slow growth.

Options 1 and 4 say the opposite of what's true - easy elimination! The real choice is between Options 2 and 3. Remember: muggles = traditional rules, wizards = different rules. 🔴 Option 1 -> opposite-claim -> says "slower rate" but passage says wizards "hog 45 percent of the growth in market cap" = fast growth, not slow! 🟢 Option 2 is correct -> directly from passage: "economic profit... is in the wizard industries" + "they're two times more R&D intensive" = higher profit + higher R&D ✓ 🔴 Option 3 -> muggle-characteristic -> "traditional economic rules" describes muggles, not wizards! Chris says wizards "play by very different set of economic rules" 🔴 Option 4 -> opposite-claim -> says "lower R&D" but passage says wizards are "two times more R&D intensive" = higher R&D, not lower!

IPMAT Indore (VA) PYQs

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