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Bunuel
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At a large manufacturing corporation, the ratio of the annual 20 Oct 2025, 00:05
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

55% (hard)

Question Stats:

64% (01:48) correct 36% (01:47) wrong based on 255 sessions

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At a large manufacturing corporation, the ratio of the annual job-related injury insurance premium per employee to average employee annual net pay increased between 1978 and 2003. Yet, the annual number of job-related injuries per employee during that time decreased by more than 30 percent.

Which of the following, if true, best explains the discrepancy outlined above?

A. From 1978 to 2003, the severity of job-related injuries at the corporation decreased significantly due to compliance with new workplace safety rules.

B. The number of employees at the corporation decreased between 1978 and 2003.

C. During the 1978– 2003 period, inflation significantly eroded the purchasing power of the dollar.

D. The corporation did not change its insurance provider during the 1978– 2003 period.

E. Between 1978 and 2003, health care costs per job-related injury rose sharply, pressuring insurance providers to raise premiums.


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E
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At a large manufacturing corporation, the ratio of the annual 21 Oct 2025, 09:47
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I can understand for E but why not C?
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At a large manufacturing corporation, the ratio of the annual 21 Oct 2025, 11:22
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Purchasing power is a multiplication factor applicable to both numerator and denominator so ultimately it has no impact.

It's because the health care charges rose significantly that they had to increase the premium. This resolves the paradox.
It answers the situation, why something rose and other thing decreased.
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I can understand for E but why not C?
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At a large manufacturing corporation, the ratio of the annual 22 Oct 2025, 05:22
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E does not tell us that why did the injuries decrease. But A tells us that they decreased because of following of safety rules. So why not A?
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At a large manufacturing corporation, the ratio of the annual 23 Oct 2025, 04:48
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arushi118
E does not tell us that why did the injuries decrease. But A tells us that they decreased because of following of safety rules. So why not A?
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Given
- The injuries decreased by 30% (Inference - Because the injuries decreased, the premiums should reduce, given the need of the safety and insurance has reduced)
- But the ratio increased - What ratio? (Avg Premium/Avg Salary)

Pardox -
- Injuries decreased, yet the ratio increased

To Solve this
- We should look for option Choice which explains why the premiums could increase OR why the salary could decrease in the period (please note the ratio increased)

Option A only explains why the no of injuries decreased BUT has no bearing on the actual discrepancy.

Option E doesn't talk about the decrease in the injuries, true, but talks about why the premium could have increased.
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At a large manufacturing corporation, the ratio of the annual 02 Nov 2025, 04:00
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Bunuel
At a large manufacturing corporation, the ratio of the annual job-related injury insurance premium per employee to average employee annual net pay increased between 1978 and 2003. Yet, the annual number of job-related injuries per employee during that time decreased by more than 30 percent.

Which of the following, if true, best explains the discrepancy outlined above?

A. From 1978 to 2003, the severity of job-related injuries at the corporation decreased significantly due to compliance with new workplace safety rules.

B. The number of employees at the corporation decreased between 1978 and 2003.

C. During the 1978– 2003 period, inflation significantly eroded the purchasing power of the dollar.

D. The corporation did not change its insurance provider during the 1978– 2003 period.

E. Between 1978 and 2003, health care costs per job-related injury rose sharply, pressuring insurance providers to raise premiums.
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Official Explanation:



E

Step 1: Identify the Question Type

The phrase “explain the discrepancy” indicates that this is an Explain question. Our task will be to resolve an apparent contradiction in the stimulus.

Step 2: Untangle the Stimulus

Explain questions typically do not involve arguments. Rather, the stimulus will present us with two seemingly contradictory statements. Our job is to reconcile them without changing any of the information we are given. Here, the apparent contradiction is that, between 1978 and 2003, the cost of insurance premiums came to represent a greater proportion of workers’ net pay. Over that same period, the number of job-related injuries per employee decreased. We would expect premiums to drop as the risk of injury drops; we need to explain the fact that they instead went up. It may also be the case that wages went down, while insurance premiums stayed the same, causing the ratio of insurance premiums to net pay to be higher.

Step 3: Predict the Answer

There must be some reason, unrelated to the number of workplace injuries, for the increase in the ratio of insurance premiums to net pay. Insurance premiums are typically tied to health care costs. So it may be that those job-related injuries that occurred in 2003 were more expensive to treat than those that occurred in 1978, either because those that occurred in 2003 were more severe or because diagnostic or other medical costs per injury increased during the stated time period.

Step 4: Evaluate the Choices

(E) matches our prediction exactly: the cost of treating an average workplace injury went way up. This would cause premiums to rise even if fewer workers were getting hurt on the job. (E) is the correct answer. (A) is incorrect because it is the opposite of what we want, or a 180. If the severity as well as the number of injuries decreased, then we would expect treatment costs, and thus insurance premiums, to decrease as well. (B) is incorrect because we’re given the insurance
premium per employee as well as the injury rate per employee. We don’t have to calculate either of those numbers, so the actual number of workers employed by the manufacturing corporation is not relevant. (C) may sound tempting because inflation could certainly cause insurance premiums to increase, but it should also cause wages to increase at a similar rate. Therefore, since what is increasing is the ratio of the insurance premium to net pay, inflation is irrelevant. (D) is incorrect because, like choice (A), it is the opposite of what we need. If the company had changed its insurance provider, that might account for the increased premiums. But if the company retained the same provider, we would expect the premiums to remain the same. Choice (E) is correct
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