Many companies have recently required their employees to pay

Question

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  A  wrong?

shanmugamgsn · Answer

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:

stoy4o · Answer

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.

adityag85 · Answer

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

:  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.
 : Good for those companies! No bearing on the conclusion.
 : 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!
 : The event in the argument has already occured. This option states what 'can' happen. OUT
 : 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!

gracerx · Answer

Doh! I selected A without reading all of the options properly. Let that be a lesson to me...

tyagigar · Answer

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 "

plumber250 · Answer

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

tyagigar · Answer

thanks James thanks for replying .....i got it now + 1 for you

HKD1710 · Answer

Cause: Increase Premium

Effect : Increased Profit

C-->E , Correct option should ruin this cause and effect relationship.

option E breaks the C&E relationship - "when cause was not there (i.e. No Increase in premium), Effect (Profit still increased) was still there".

+1 E

sun01 · Answer

Please help me understand the option E.

The company x does some stuff that leads to another stuff. How it can be weakened by that company y doesn't do the same stuff and leads to same outcome stuff what company x got?

ASHISHBAHL · Answer

This is tested most frequently on GMAT with Assumptions, Strengthen and Weaken Questions.

A causes B

Premium given by employees (rather than by company itself) caused company's profit to increase to 11%(because company not paying that part)

To weaken - we can show A does not happens but B happens - then A is not the cause of B

This is perfectly done by answer choice E

Premium paid by employees did not increase - But Profits increase by more than 11% - 16% to be exact.

Another way to weaken such type of questions is:

C causes B
Or
A happens and B does not happen i.e. Premiums paid by employees increased but profits either stay flat or decreased.

Regards

shamimtex03 · Answer

So, I need to weaken the argument's conclusion. If we can show another explanation( here,another unknown reason) for the Same effect, the argument will be less likely to be true. E shows exactly what we need. Maybe, there's another reason. maybe the cut cost decreases the profit, but increases( compare 11% and 16%)

Skywalker18 · Answer

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. ISWAT - it might have an adverse effect down the line , but at present the company is still making profits
B: Companies that have cut employee benefit costs in other areas such as retirement packages have also seen increased profits. - Irrelevant - just because there is another method to reduce cost , it does not mean the increasing health insurance is not a viable method
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. - Irrelevant - 
D: Because employees often object to paying a large percentage of health insurance premiums, it can take a long time to implement the changes. - Irrelevant - we are only concerned about once the plan is implemented
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. - Correct - So the increase in profit was not due increase in health insurance premium but due to some other factor

Answer E

devikeerthansr · Answer

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.

This option shows that profit has actually decreased compared to profits of other companies.This is the right option

manjot123 · Answer

In opiton e 
Effect occurred without cause

Paras96 · Answer

IMO E

This is a causal argument, hence to weaken the argument the premise needs to be weakened for which we have to prove that increasing the percentage of the cost of health insurance premiums may not be the only factor for the increase of profitability of the companies. Option E proves the same i.e., there may be more factors as well for the increase of profitability of the companies.

Many companies have recently required their employees to pay

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Many companies have recently required their employees to pay

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