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Many companies have recently required their employees to pay

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Many companies have recently required their employees to pay [#permalink] New post 24 Nov 2012, 04:20
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Question Stats:

69% (02:01) correct 30% (02:05) wrong based on 2 sessions
Many companies have recently required their employees to pay an increasing percentage of the cost of health
insurance premiums. On average, the companies that instituted this change reported an 11 percent increase in
profits for the last fiscal year.

If, on the basis of the evidence above, it is argued that increasing the portion of health insurance costs
paid directly by employees increased a company's profitability, which of the following, if true, would most seriously
weaken that argument?

A: The increased cost of health insurance premiums at some companies led highly skilled employees of those
companies to move to competing firms with lower health costs.
B: Companies that have cut employee benefit costs in other areas such as retirement packages have also seen
increased profits.
C: Companies that increased the percentage of health insurance premiums paid directly by employees were just as
likely as other companies to give employees a raise during the last fiscal year.
D: Because employees often object to paying a large percentage of health insurance premiums, it can take a long time
to implement the changes.
E: On average, companies that did not increase the percentage of health insurance premiums paid by their employees
reported a 16 percent increase in profits for the last fiscal year.

why is
[Reveal] Spoiler:
A
wrong?
[Reveal] Spoiler: OA

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Re: Many companies have recently required their employees [#permalink] New post 24 Nov 2012, 04:46
gmatbull wrote:
Many companies have recently required their employees to pay an increasing percentage of the cost of health
insurance premiums. On average, the companies that instituted this change reported an 11 percent increase in
profits for the last fiscal year.

If, on the basis of the evidence above, it is argued that increasing the portion of health insurance costs
paid directly by employees increased a company's profitability, which of the following, if true, would most seriously
weaken that argument?

A: The increased cost of health insurance premiums at some companies led highly skilled employees of those
companies to move to competing firms with lower health costs.
B: Companies that have cut employee benefit costs in other areas such as retirement packages have also seen
increased profits.
C: Companies that increased the percentage of health insurance premiums paid directly by employees were just as
likely as other companies to give employees a raise during the last fiscal year.
D: Because employees often object to paying a large percentage of health insurance premiums, it can take a long time
to implement the changes.
E: On average, companies that did not increase the percentage of health insurance premiums paid by their employees
reported a 16 percent increase in profits for the last fiscal year.

why is
[Reveal] Spoiler:
A
wrong?



Oh i selected A!!!

I felt E seems to give another fact like stated in conclusion/premise..
How come this will weaken the argument????

:twisted:
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Re: Many companies have recently required their employees [#permalink] New post 24 Nov 2012, 14:48
gmatbull wrote:
Many companies have recently required their employees to pay an increasing percentage of the cost of health
insurance premiums. On average, the companies that instituted this change reported an 11 percent increase in
profits for the last fiscal year.

If, on the basis of the evidence above, it is argued that increasing the portion of health insurance costs
paid directly by employees increased a company's profitability, which of the following, if true, would most seriously
weaken that argument?

A: The increased cost of health insurance premiums at some companies led highly skilled employees of those
companies to move to competing firms with lower health costs.
B: Companies that have cut employee benefit costs in other areas such as retirement packages have also seen
increased profits.
C: Companies that increased the percentage of health insurance premiums paid directly by employees were just as
likely as other companies to give employees a raise during the last fiscal year.
D: Because employees often object to paying a large percentage of health insurance premiums, it can take a long time
to implement the changes.
E: On average, companies that did not increase the percentage of health insurance premiums paid by their employees
reported a 16 percent increase in profits for the last fiscal year.

why is
[Reveal] Spoiler:
A
wrong?


Losing talent is not the same as losing money. Hence it doesn't directly weaken the conclusion.

E is an example of effect happening (profit up) without cause (raising health insurance premiums) occurring.
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Re: Many companies have recently required their employees [#permalink] New post 25 Nov 2012, 01:37
Premise: many companies that reqd. employees to pay higher ins. premiums -> Those companies increased profits averaging 11%
Conclusion: Inc. premiums -> Profits

Task: Find an alternate reason that can lead to higher profits /or/ prove that substantial no. of companies that increased premiums didn't see inc. in profits

[A]: Some companies bla bla. The argument never said 'ALL' companies saw inc. in profits. Also, the argument is concerned only about premuims paid by employees regardless they are highly skilled or not.
[B]: Good for those companies! No bearing on the conclusion.
[C]: Giving a likely raise to employees has no bearing on profits. If you are thinking that giving out money to employees will decrease the profit/revenue, then you're thinking too far!
[D]: The event in the argument has already occured. This option states what 'can' happen. OUT
[E]: This states that ins. premiums paid are not the cause of profits, if anything, ins. premiums paid marginally decrease avg. profits (11% v/s 16% avg. profits).

IMO, E wins!
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Re: Many companies have recently required their employees [#permalink] New post 26 Nov 2012, 07:02
Doh! I selected A without reading all of the options properly. Let that be a lesson to me...
Re: Many companies have recently required their employees   [#permalink] 26 Nov 2012, 07:02
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