Cause Effect – MBA CET questions with solutions

Approach: Cause–effect pair: check whether one statement produces the other, or each is the result of its own separate cause.

Solution:
Statement 2 (crude prices rising) would, if it acted on Statement 1, push domestic petrol/diesel prices up — not keep them unchanged. So 2 is not the cause of 1.
Statement 1 cannot cause a rise in international crude prices either.
Unchanged domestic prices are the result of a domestic pricing decision (government / oil companies absorbing the cost).
Rising crude is the result of global supply–demand factors.
So both statements are effects, each of its own, independent cause.

Why the other options are wrong:
A: domestic prices cannot move international crude prices.
B: a crude rise would cause a price hike, not a freeze.
C: both statements describe outcomes, not triggering events.
E: no single factor explains both a global price rise and a domestic freeze.

Cetking shortcut: If the expected effect of one statement is the opposite of what the other says, they are not cause–effect; ask "what caused each?"

Answer: D

Approach: Cause–effect pair: look for the time order and a direct link between the two events.

Solution:
Statement 2 happened last year: parents agitated against the high fees of unaided institutions.
Statement 1 happened recently: the government fixed much lower fees for those very institutions.
The government action directly answers the parents' complaint, and it comes after it.
So Statement 2 is the cause and Statement 1 is its effect.

Why the other options are wrong:
A: a later event (fee fixing) cannot cause an earlier one (last year's agitation).
C: the two are directly linked, not independent.
D: Statement 2 is the trigger, not an effect.
E: no third common cause is needed; 2 explains 1.

Cetking shortcut: Time words ("last year" vs "recently") usually tell you which statement is the cause.

Answer: B

Approach: Cause–effect pair: decide whether either decision produces the other or whether they stand as separate decisions.

Solution:
Statement 1: private medical colleges raised fees by 200% (their own decision, to meet expenses).
Statement 2: government medical colleges kept fees unchanged despite price escalation (a separate government policy decision).
Neither decision produces the other — the private hike does not make government colleges freeze fees, and the freeze does not make private colleges raise fees.
Each is a separate, stand-alone decision that will set off its own consequences (e.g. demand shifting to government seats). So they are treated as independent causes.

Why the other options are wrong:
A / B: neither statement leads to the other.
D: the pair is read as two stand-alone decisions rather than outcomes of stated causes (the answer key takes C).
E: one college group raised fees and the other did not, so no single common cause drives both in the same way.

Answer: C

Approach: Cause–effect pair: find the business link between the two facts.

Solution:
Statement 2: many Asian countries are importing huge quantities of steel from India — i.e. big export demand.
Statement 1: most Indian steel companies made considerable profits last year.
Large export orders raise sales and revenue of steel producers, which shows up as profit.
So Statement 2 is the cause and Statement 1 is its effect.

Why the other options are wrong:
A: profits of Indian companies do not make other countries import steel.
C: the statements are directly linked.
D: Statement 2 is the driver, not an outcome.
E: the export demand itself explains the profits; no separate common cause is needed.

Cetking shortcut: Demand / orders → revenue → profit: whichever statement is about demand is usually the cause.

Answer: B