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Garnet and RenCo each provide health care for their [#permalink]
 20 Jan 2005, 21:24
Question Stats:
69% (01:53) correct
30% (00:47) wrong based on 3 sessions
Garnet and RenCo each provide health care for their employees. Garnet pays for both testing of its employees' cholesterol levels and treatment of high cholesterol. This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment. However, RenCo dose not have the same financial incentive to adopt such a policy, because ______. A. early treatment of high cholesterol dose not entirely eliminate the possibility of a stroke later in life B. the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol C. RenCo has significantly more employees than Garnet has D. RenCo's employees are unlikely to have higher cholesterol levels than Garnet's employees E. the average length of time an employee stays with RenCo is less than it is with Garnet
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E
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Clearly E
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E)
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One more for 'E'
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E. The only one which talks about the time frame. the average length of time an employee stays with RenCo is less than it is with Garnet
which is of importance because it is said that This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment
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E for me too
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 12:12
As far as I know average is not a good indicator for any stats. In this case, it's been argued that average length of time an employee stays with RenCo is less than with Garnet. But in reality, this average might be less just because of few employees. Other employees may very well have length of time greater than that with Garnet. Considering this factor, is E still correct as many have suggested on this forum? Can someone please explain? Also, I chose C because I thought if RenCo has more number of employees then upfront expenditure may be much more than the Garnet and my assumption is that not many employees will necessarily require expensive treatment. Hence, RenCo may not have the same advantage as Garnet. I was not fully convinced with this option either, but it sounded better than E.
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 14:43
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sgupta0827 wrote: As far as I know average is not a good indicator for any stats. In this case, it's been argued that average length of time an employee stays with RenCo is less than with Garnet. But in reality, this average might be less just because of few employees. Other employees may very well have length of time greater than that with Garnet. Considering this factor, is E still correct as many have suggested on this forum? Can someone please explain?
Also, I chose C because I thought if RenCo has more number of employees then upfront expenditure may be much more than the Garnet and my assumption is that not many employees will necessarily require expensive treatment. Hence, RenCo may not have the same advantage as Garnet. I was not fully convinced with this option either, but it sounded better than E. I agree with you to an extent. The average is not a good indicator when the data are too widely dispersed. However, if we consider the standard deviation is not too much, the answer perhaps lies in the word "incentive". If we replace the word "incentive" with "capacity", "C" becomes a stronger candidate. Incentive is something like an ROI. If RenCo's employees quit every two years, why does it have to worry about the long term demerits of the ailment as to oppose to the Garnet employees, who work at least 25-30 years for the company. Yes, I am assuming a wild case where the average of the two cases will vary significantly. Too many assumptions are making it a weak argument. But, E is the strongest among the weak.
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 16:27
fluke wrote: sgupta0827 wrote: As far as I know average is not a good indicator for any stats. In this case, it's been argued that average length of time an employee stays with RenCo is less than with Garnet. But in reality, this average might be less just because of few employees. Other employees may very well have length of time greater than that with Garnet. Considering this factor, is E still correct as many have suggested on this forum? Can someone please explain?
Also, I chose C because I thought if RenCo has more number of employees then upfront expenditure may be much more than the Garnet and my assumption is that not many employees will necessarily require expensive treatment. Hence, RenCo may not have the same advantage as Garnet. I was not fully convinced with this option either, but it sounded better than E. I agree with you to an extent. The average is not a good indicator when the data are too widely dispersed. However, if we consider the standard deviation is not too much, the answer perhaps lies in the word "incentive". If we replace the word "incentive" with "capacity", "C" becomes a stronger candidate. Incentive is something like an ROI. If RenCo's employees quit every two years, why does it have to worry about the long term demerits of the ailment as to oppose to the Garnet employees, who work at least 25-30 years for the company. Yes, I am assuming a wild case where the average of the two cases will vary significantly. Too many assumptions are making it a weak argument. But, E is the strongest among the weak. Thanks fluke for the explanation. Perhaps I am still lacking the depth to understand these questions. Even after reading your explanation I don't understand the difference between capacity and incentive, and why would capacity make "C" a stronger candidate? I am always wary about choosing an option with "average". Do you know any strategy when I am in dilemma about these options?
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 18:01
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sgupta0827 wrote: Thanks fluke for the explanation. Perhaps I am still lacking the depth to understand these questions. Even after reading your explanation I don't understand the difference between capacity and incentive, and why would capacity make "C" a stronger candidate? I am always wary about choosing an option with "average". Do you know any strategy when I am in dilemma about these options? Like I said, your doubt about the average is justified. "However, RenCo dose not have the same financial incentive to adopt such a policy, because RenCo has significantly more employees than Garnet has." Now, how do we know that there are no financial incentives to adopt a policy just on the basis of company's employee strength? We actually don't unless we are given a good reason. "E" gives us that reason. Let's think it like this: I) I'm not going to get much return even if I medically insure my employees because they are just too many in numbers. (Financial incentive-the return of investment) II) I just can't afford to medically insure my employees because they are too many in numbers. (Financial incapacity) III) I'm not going to get much return even if I medically insure my employees because they will leave my company after a short time anyway. E is trying to say just that in a convoluted manner. IMO, "III" is a better reason than "I" for not getting the employees insured.
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 20:00
fluke wrote: sgupta0827 wrote: Thanks fluke for the explanation. Perhaps I am still lacking the depth to understand these questions. Even after reading your explanation I don't understand the difference between capacity and incentive, and why would capacity make "C" a stronger candidate? I am always wary about choosing an option with "average". Do you know any strategy when I am in dilemma about these options? Like I said, your doubt about the average is justified. "However, RenCo dose not have the same financial incentive to adopt such a policy, because RenCo has significantly more employees than Garnet has." Now, how do we know that there are no financial incentives to adopt a policy just on the basis of company's employee strength? We actually don't unless we are given a good reason. "E" gives us that reason. Let's think it like this: I) I'm not going to get much return even if I medically insure my employees because they are just too many in numbers. (Financial incentive-the return of investment) II) I just can't afford to medically insure my employees because they are too many in numbers. (Financial incapacity) III) I'm not going to get much return even if I medically insure my employees because they will leave my company after a short time anyway. E is trying to say just that in a convoluted manner. IMO, "III" is a better reason than "I" for not getting the employees insured. hmm now I understand the difference between ROI and Financial capacity in this context.
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Re: CR - Garnet and RenCo [#permalink]
24 Sep 2011, 22:41
E looks good. whats OA?
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Re: CR - Garnet and RenCo [#permalink]
25 Sep 2011, 03:06
Fluke really nice explanation.. Thanks!! fluke wrote: sgupta0827 wrote: Thanks fluke for the explanation. Perhaps I am still lacking the depth to understand these questions. Even after reading your explanation I don't understand the difference between capacity and incentive, and why would capacity make "C" a stronger candidate? I am always wary about choosing an option with "average". Do you know any strategy when I am in dilemma about these options? Like I said, your doubt about the average is justified. "However, RenCo dose not have the same financial incentive to adopt such a policy, because RenCo has significantly more employees than Garnet has." Now, how do we know that there are no financial incentives to adopt a policy just on the basis of company's employee strength? We actually don't unless we are given a good reason. "E" gives us that reason. Let's think it like this: I) I'm not going to get much return even if I medically insure my employees because they are just too many in numbers. (Financial incentive-the return of investment) II) I just can't afford to medically insure my employees because they are too many in numbers. (Financial incapacity) III) I'm not going to get much return even if I medically insure my employees because they will leave my company after a short time anyway. E is trying to say just that in a convoluted manner. IMO, "III" is a better reason than "I" for not getting the employees insured. |
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Re: CR - Garnet and RenCo [#permalink]
26 Sep 2011, 09:44
pb_india wrote: Garnet and RenCo each provide health care for their employees. Garnet pays for both testing of its employees' cholesterol levels and treatment of high cholesterol. This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment. However, RenCo dose not have the same financial incentive to adopt such a policy, because ______.
A. early treatment of high cholesterol dose not entirely eliminate the possibility of a stroke later in life
B. the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol
C. RenCo has significantly more employees than Garnet has
D. RenCo's employees are unlikely to have higher cholesterol levels than Garnet's employees
E. the average length of time an employee stays with RenCo is less than it is with Garnet C and E are strong choices I would go with E What's the OA?
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Re: CR - Garnet and RenCo [#permalink]
26 Sep 2011, 14:29
Well i am stuck at C...though i have not covered this type of ques stem yet....But it looks reasonable.... QA
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Re: Garnet and RenCo each provide health care for their [#permalink]
02 Jan 2012, 09:42
E should be the answer. It specifies why RenCo does not have the "incentive" for such a move. If its employees are going to quit the company within a short span, then paying for the testing and treatment of high cholesterol does not make sense. The company would not incur any long term loss anyway because its employees would already have quit by the time they develop high cholesterol levels.
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Re: Garnet and RenCo each provide health care for their [#permalink]
02 Jan 2012, 11:20
whts wrong with C???
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Re: Garnet and RenCo each provide health care for their [#permalink]
02 Jan 2012, 12:12
rajeevrks27 wrote: whts wrong with C??? I think the explanations discussed above might help. Just having more employees is not sufficient to act as a deterrent to the financial incentive. That is why E is better.
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Re: Garnet and RenCo each provide health care for their [#permalink]
02 Jan 2012, 20:35
+1 for E
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Re: Garnet and RenCo each provide health care for their
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02 Jan 2012, 20:35
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