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Critical Thinking Study Guide Fall 2012 College of Business, University of Houston-Downtown

The UHD College of Business has established a learning goal that all business students be analytical thinkers. Analytical thinking is also referred to as critical thinking. Analytical thinkers demonstrate the following abilities: Raise relevant and key questions; Gather and assess relevant information; Use abstract ideas in interpreting information; Reach well-reasoned conclusions; and Draw reasonable inferences from a set of information As part of this course you will be taking the Business Critical Thinking Skills Test (BCTST) between October 15 and October 31. You will be taking the BCTST outside your class period and on your own time. You will need to allow 2.5 hours for this test. The BCTST is a nationally normed measure of critical thinking skills applied to business. It is designed for BBA students (like you). Content knowledge is not required. It is your ability to reason and think critically that is measured by the BCTST. Business contexts or scenarios are used for most questions. The question formats include short scenarios, images and diagrams, charts and graphs. The questions may require that you (1) make an accurate interpretation of the information presented in the question, (2) draw reasonable and correct inferences or (3) evaluate the quality of objections to an inference. Although there is no subject matter to study for this test, you can improve your score by becoming familiar with the question formats and by practicing reasoning skills. This guide will provide key information that will prepare you for the BCTST. Short Definitions of Critical Thinking Skills Critical thinking can be divided into different categories. These categories are: Analysis: The ability to understand the meaning of events, data, beliefs, situations and experiences. Inference: The ability to draw reasonable conclusions from relevant information. Evaluation: The ability to assess the credibility and logical strength of statements or evidence. Deductive Reasoning: A process of finding that a conclusion must be true if the premises are true. Inductive Reasoning: A process of finding that a conclusion is justified but not required assuming the truth of the set of facts presented. General Tips for Effective Reasoning 1. Understand the question. 1

2. 3. 4. 5.

Identify your assumptions and whether they are reasonable. Use the data, information or evidence provided. Infer only what the evidence implies. Beware of assuming facts that are not presented in the information provided.

Sample Question #1* Three graduate school friends, Anna, Barbara, and Carol, graduated successfully. Being in the same program, the three often worked as a team on group assignments. Anna earned the special recognition of pass with distinction when she graduated. Carol and Barbara, although receiving their degrees, did not earn this special honor. A fourth student in the same graduate program, Deirdre, often said that the graduate program was poorly designed and not difficult at all. Deirdre did not graduate, instead she was advised by the faculty to withdraw from the program because her work was below acceptable standards. Given this information only, it follows that A. B. C. D. E. Carol and Barbara deserved to receive pass with distinction like Anna. Barbaras work in the program was superior to Carols. Barbara was jealous of the academic success her friend, Anna, enjoyed. Deirdres work in the program was below the quality of Carols work. Anna, being successful, will decide to enroll in another advanced graduate program.

Analysis of each option: A. There is no information provided about what criteria are used to determine the pass with distinction honor. Therefore, you can assume that Carol and Barbara do not deserve it. The only facts that we have are that they worked together as a team on group assignments and that they all graduated. This is not sufficient evidence to infer that Carol and Barbara should also graduate with distinction. B. There is no information about the relative quality of Barbara and Carols work. Our information is limited to the fact that they both graduated. C. There is no information about Barbaras feelings or reactions to Annas graduation with distinction. She may have been delighted. We simply dont know. D. Unlike B we do have information about Deirdres work. We are told that she was advised by the faculty to withdraw because her work was below acceptable standards. We also know that Carol graduated. Therefore, it is a reasonable inference that Deirdres work is below the quality of Carols work. This is the correct answer! E. There is no information about Annas plans for the future. Sample Question #2* Using the phone at her desk, Sylvia, in Corporate Sales consistently generates a very steady $1500 per hour in gross revenue for her firm. After all of her firms costs have been subtracted, Sylvias sales amount to $100 in bottom line (net) profits every 15 minutes. At 10:00 a.m. one day the desk phone Sylvia uses to make her sales calls breaks. Without the phone Sylvia cannot make any sales. Assume that Sylvias regular schedule is to begin at 8:00 a.m. Assume she works for four hours, takes a one hour lunch exactly at noon, and then returns promptly to her desk for four more hours of afternoon sales. Sylvia loves her work and the broken phone is keeping her from it. If necessary she will try to repair the

phone herself. Which of the following options would be in the best interest of Sylvias firm to remedy the broken phone problem? A. Use Eds Phone Repair Shop down the street. Ed can replace Sylvias phone by 10:30 a.m. Ed will charge the firm $500. B. Assign Sylvia to a different project until her phone can be replaced with one from the firms current inventory. Replacing the phone is handled by the night shift. C. Authorize Sylvia to buy a new phone during her lunch hour for $75 knowing she can plug it in and have it working with a few minutes after she gets back to her desk at 1:00 p.m. D. Ask Sylvia to try to repair her phone herself. She will probably complete the repair by 2:00 p.m.; or maybe later. Analysis of Each Option: Begin with recognizing the KEY question. The key question is which option will generate the largest net gain for the company. You know that Sylvia brings in $100 net profit for the company every 15 minutes. Therefore, the company is losing a potential of $100 every 15 minutes during the period that Sylvias phone is not working. A. Under this scenario Sylvia is able to return to her work at 10:30 a.m. Therefore, she will work from 10:30 a.m. to noon (1.5 hours) and from 1 5 p.m. (4 hours). In 5.5 hours, Sylvia will bring in $2200 in net profit for her firm. The $2200 is calculated as follows: 1. $100 per 15 minutes is $400 per hour. 2. 5.5 hours times $400 per hour is $2200. However, it will cost the firm $500. So, what is the net gain for the firm? $2200 - $500 = $1700. B. In this scenario, Sylvia is unable to return to her telephone sales until the next day. The firm loses $2400. The $2400 is calculated as follows: 6 hours times $400 per hour. C. Under this scenario Sylvia is able to return to her telephone sales at 1 p.m. Therefore, she is able to bring in $1600 in sales ($400 times 4 hours). It costs the company $75. So the firms net gain is $1525. ($1600 - $75) D. In this last scenario, Sylvia returns to her telephone sales at 2 p.m. (or later). Assuming that she returns to work at 2 p.m. , she will work 3 hours before quitting time. During those 3 hours, she will bring in $1200 for the company ($400 times 3 hours). The best option for the firm is the option that brings the most money into the firm. Therefore, A is the best option since the firm will gain $1700.

Sample Question #3 The following table shows the market for gidgets at different prices.

Price per ton (in hundreds of dollars)

Quantity demanded

Quantity supplied




50 30 10 8 6 4

95 110 125 140 155 170

170 160 150 140 130 120

Based on the information provided in this table, which of the following is NOT true? A. At a price of $50, the quantity of gidgets supplied is greater than the quantity demanded gidgets. B. There is no price at which the quantity of gidgets supplied is exactly equal to the quantity of gidgets demanded. C. At a price of $4, there is a shortage of gidgets in the market. D. At a price of $30, there is a surplus of gidgets in the market. Analysis of Each Option: A. Row 2 of the data shows the supply and demand for gidgets at a price of $50. 170 gidgets will be supplied. 95 gidgets will be demanded. Therefore, the statement is true. B. You are looking for a row in which the quantity supplied and the quantity demanded is equal. This occurs when the price is $8. Therefore, this statement is false. C. The last row of the data shows the supply and demand for gidgets at a price of $4. 120 gidgets will be supplied and 170 gidgets will be demanded. Therefore, there is more demand than supply so there will be a shortage in the gidget market. This statement is true. D. Row 3 of the data shows the supply and demand for gidgets at a price of $30. 160 gidgets will be supplied and 110 gidgets will be demanded. Therefore, there is more supply than demanded so there will be a surplus in the gadget market. This statement is true. The question asks that you identify the FALSE statement. B is the only false statement. Sample Question #4

Daily Average Number of Swimmers

1. In which year was the average number of daily swimmers the highest? A. 2003 B. 2004 C. 2005 D. 2006 E. Cannot say Analysis of Answers In this question one should make an estimation by looking at the numbers (there is no need to calculate) and see that 2004 appears to be the largest. Here is the long calculation for the number of swimmers each year: 2003: 30 + 20 + 80 = 130 2004: 40 + 80 + 60 = 180 2005: 70 + 50 + 40 = 160 2006: 30 + 60 + 30 = 120 The correct answer is B. 2. Assuming the children group is 50% boys and 50% girls, how many more males swam at Aldeburgh beach in 2006 than in 2005? A. 35 B. 45 C. 10 D. 5 E. Cannot say Analysis of Answers If the children group is equally distributed between boys and girls, then we can simply divide the amount of children by two, and add it to the amount of male swimmers in each year: 2006 Men:60

Boys: 30/2=15 Total male swimmers: 75 2005 Men:50 Boys: 40/2=20 Total male swimmers: 70 (75-70)=5 more male swimmers in 2006. The correct answer is D. Sample Question #5

Approximately, what is the percentage growth in final energy consumption for the domestic sector in million tonnes of oil equivalent? A. 2 B. 2.08 C. 20.88 D. 23.81 E. 18.96 Analysis of Answers To answer this question we must first find the amount of oil equivalent used by the domestic sector in each year. In 2001: 213.6*0.29 = 61.94 million tons. In 2011: 237.7*0.31 = 73.69 million tons. The percentage growth rate would be: (73.69/61.94)-1 = 0.18957. Multiply by 100 to get 18.96%. In short: [(237.7*0.31)/(213.6*0.29)-1]*100=18.96 The correct answer is E. Want to Prepare More? We have identified two websites in which you can practice your critical thinking skills. Both sites are free and provide answers (with explanations) to the questions. Website #1:

For more practice, we encourage you to visit Practice interpreting different types of charts. Click on Aptitude and then choose Data Interpretation. You will find a set of folders for different types of charts. Answers and explanation are provided. Practice your reasoning skills. Click on Reasoning and then choose Logical Reasoning. You will find a set of folders. We recommend working problems in the following folders: Making Judgments, Logical Games, Verbal Reasoning, and Analyzing Arguments.

Website #2: This website contains reasoning scenarios similar to the question on the health and exercise experiment. Go to Choose Practice GMAT Questions. Then choose Critical Reasoning. If you are thinking about taking the GMAT, this will be a good resource for you as well. BCTST Information You will receive additional instructions from your instructor on when and how to access the Business Critical Thinking Skills Test.

*Questions from Sample Thinking Skills Questions,

Work On Your Own Exercise* Try the following on your own. (Your instructor has been provided the answers.) For the next 3 questions (I, II, III), please consider the following information: A scientific study considered two matched groups of college women. The women in both groups were presented with information about the benefits of a healthy diet and regular exercise. The women in one group were paired up with one another and encouraged to work as two-person teams to help each other stick with the recommended healthy regimen of smart eating and regular vigorous exercise. The women in the other group were encouraged to use the same recommended regimen, but they were also advised to work at it individually, rather than with a partner or teammate. After 50 days the physical health and the well-being of all the women in both groups were evaluated. On average the women in the first group (with teammates) showed a 26 point improvement in measures of cardiopulmonary capacity, body strength, body fat reduction, and sense of well-being. On average the women in the other group (encouraged to work as individuals) showed a 17 point improvement on those same measures. Using statistical analyses the researchers determined that the probability that a difference of this size had occurred by chance was less than one in 1000.

I. If true, these research findings would tend to support which of the following assertions? A. A college woman cannot achieve optimal health functioning without a teammate. B. Universities should require all students living in campus residence halls to participate in a health regime of smart eating and regular vigorous exercise. C. A healthy diet will cause one to have better mental health and physical strength. D. This research study was funded by a corporation that makes exercise apparel. E. A regime of smart eating and regular exercise is related to better health.

II. If the information given in the case above were true, which of the following hypotheses would not need to be ruled out in order to confidently claim that for the majority of young adults a regime of smart eating and regular vigorous exercise will result in significant improvements in ones overall health? A. This study was about women, the findings cannot be generalized to include men. B. Since the study began to solicit willing participants before the Research Ethics Review Committee of the college gave the research project its formal approval to gather data, the findings are invalid. C. Some women in the study over-reported their compliance with the eating and exercise regimen, which led the researchers to underestimate the full impact of the regimen. D. Since many of those studied described themselves as overweight or out of shape when the study began, a similar regimen will not benefit people who are healthier to start with. E. The performance tests used to evaluate the health and well-being of females may not be appropriate for evaluating the health and well-being of a males.

III. Consider the claim, Working with a teammate or partners on a health regimen is better than working individually. Which of the following additional pieces of information would not weaken that claim? A. B. C. D. E. Most of the women in the group that was encouraged to work individually actually worked with friends and partners who were not part of the study. Most of the pairings and teams created in the first group (with teammates) fell apart after a few days and the women in that group actually worked individually. There was something about the women in the first group (with teammates) that the researchers overlooked, thus invalidating the intended matching of the two groups. Men are more likely to work alone, so any recommendation that men find a teammate or partner to support them in sticking with the regimen will be ignored. The study was undertaken when there were no exams or major projects due, thus the results about working with a teammate do not apply to more stressful times of the year.

*Questions from Sample Thinking Skills Questions,