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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, 03:20
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Difficulty:

  35% (medium)

Question Stats:

65% (02:36) correct 35% (01:32) wrong based on 248 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, 03:46
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, 13:48
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, 00:37
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, 06:02
Doh! I selected A without reading all of the options properly. Let that be a lesson to me...
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Re: Many companies have recently required their employees [#permalink] New post 05 Oct 2013, 05:07
adityag85 wrote:
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!


can someone please explain why d is wrong it says implementing will take time so even if companies increased the premium it is yet not implemented and therefore the profits can not be attributed to premium increase "
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Re: Many companies have recently required their employees to pay [#permalink] New post 05 Oct 2013, 05:39
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Hi,

D is wrong because it confuses time frames....

The statement is that for companies that have made the change Profits are up by 11%.

D is talking about the timeframe. This is irrelevant for the purposes of our argument, as in the example we are given the change has already happened.

Also - think about the question it is 'most seriously weakens' - that is clearly E. Even if the 'delay' was a factor, it would not be more serious than the problem posed by E.

James
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Re: Many companies have recently required their employees to pay [#permalink] New post 06 Oct 2013, 06:24
plumber250 wrote:
Hi,

D is wrong because it confuses time frames....

The statement is that for companies that have made the change Profits are up by 11%.

D is talking about the timeframe. This is irrelevant for the purposes of our argument, as in the example we are given the change has already happened.

Also - think about the question it is 'most seriously weakens' - that is clearly E. Even if the 'delay' was a factor, it would not be more serious than the problem posed by E.

James


thanks James thanks for replying .....i got it now + 1 for you
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Re: Many companies have recently required their employees to pay [#permalink] New post 24 Jun 2015, 20:27
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: Many companies have recently required their employees to pay   [#permalink] 24 Jun 2015, 20:27
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