CAT 2017 Slot 1 Question Paper

Instructions

The passage below is accompanied by a set of three questions. Choose the best answer to each question.

Do sports mega events like the summer Olympic Games benefit the host city economically? It depends, but the prospects are less than rosy. The trick is converting...several billion dollars in operating costs during the 17-day fiesta of the Games into a basis for long-term economic returns. These days, the summer Olympic Games themselves generate total revenue of $4 billion to $5 billion, but the lion's share of this goes to the International Olympics Committee, the National Olympics Committees and the International Sports Federations. Any economic benefit would have to flow from the value of the Games as an advertisement for the city, the new transportation and communications infrastructure that was created for the Games, or the ongoing use of the new facilities.

Evidence suggests that the advertising effect is far from certain. The infrastructure benefit depends on the initial condition of the city and the effectiveness of the planning. The facilities benefit is dubious at best for buildings such as velodromes or natatoriums and problematic for 100,000-seat Olympic stadiums. The latter require a conversion plan for future use, the former are usually doomed to near vacancy. Hosting the summer Games generally requires 30-plus sports venues and dozens of training centers. Today, the Bird's Nest in Beijing sits virtually empty, while the Olympic Stadium in Sydney costs some $30 million a year to operate.

Part of the problem is that Olympics planning takes place in a frenzied and time-pressured atmosphere of intense competition with the other prospective host cities — not optimal conditions for contemplating the future shape of an urban landscape. Another part of the problem is that urban land is generally scarce and growing scarcer. The new facilities often stand for decades or longer. Even if they have future use, are they the best use of precious urban real estate?

Further, cities must consider the human cost. Residential areas often are razed and citizens relocated (without adequate preparation or compensation). Life is made more hectic and congested. There are, after all, other productive uses that can be made of vanishing fiscal resources.

Question 22

The central point in the first paragraph is that the economic benefits of the Olympic Games

Solution

The author expresses his views that hosting Olympics cost a lot and the financial prospects are not that good. Towards the end of the first paragraph, he uses the line "Any economic benefit would have to flow from the value of the Games as an advertisement for the city, the new transportation and communications infrastructure that was created for the Games, or the ongoing use of the new facilities". From this line, we can infer that the author states that there are any benefits, it should be from advertisements and the use of the facilities (implying that the other streams are unlikely to yield any revenue).

It has not been mentioned that the 3 committees share the profit equally. Even if they do, it is not the main point that the author intends to convey through the first paragraph. Therefore, we can eliminate option A. 

Option B states that the revenue accrues through advertisement and ticket sales. No information has been provided about 'ticket sales' and hence, option B can be eliminated.

Option D states that the revenues are usually eroded by the expenditure incurred by host city. The second paragraph builds on revenue from 'advertising and infrastructure' implying that the primary purpose of the first paragraph was to introduce these topics rather than to lament that the expenditure of the host city erodes the revenue. Therefore, option C is the right answer.

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