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Strengthening Question

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Strengthening Question

by gmatusa2010 » Wed Jul 28, 2010 10:31 pm
Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explaination is wrong. Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.

Which of the following, if true, lends the greatest support to the editorial argument?

A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies

B) Because insurers are publicly traded companies that must meet profit goals, many increases in cost are folloed by an increase in prices that exceeds the amount of the cost increase by a fixed amount

The rest of the choices are irrelevant.

I got this wrong and I don't like the explanaition provider for the OA. To me this is a toss up. Inputs??

My analysis:

Conclusion: legal costs + outrageous awards = high insurance price IS wrong. Answer should prove this or stregthen why legal costs + outrageous awards does not contribute to high insurance.
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by neha.patni » Wed Jul 28, 2010 11:02 pm
gmatusa2010 wrote:Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explaination is wrong. Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.

Which of the following, if true, lends the greatest support to the editorial argument?

A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies

B) Because insurers are publicly traded companies that must meet profit goals, many increases in cost are folloed by an increase in prices that exceeds the amount of the cost increase by a fixed amount

The rest of the choices are irrelevant.

I got this wrong and I don't like the explanaition provider for the OA. To me this is a toss up. Inputs??

My analysis:

Conclusion: legal costs + outrageous awards = high insurance price IS wrong. Answer should prove this or stregthen why legal costs + outrageous awards does not contribute to high insurance.
IMO B

A) Strengthens the point that the legal costs are responsible for increase in charge because the unanticipated increase is the legal costs is the reason why the insurance company increases the charge. Hence it weakens the editorial's claim

B) This validates the editorial's claim because the insurance company's effort to achieve profits leads to increased insurance charge, which, by far exceeds the increase in insurance charge substantiated by the fixed increase in cost.
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by gmatusa2010 » Wed Jul 28, 2010 11:15 pm
neha my thoughts were similar, however i don't think A weakens the editorial's comment. A said prices charged DO NOT take into consideration legal costs so it weakens the insurances claim that legal cost + award = high price. Although it is arguable because there's a slight change from "legal costs" to "future increases in legal costs". Regardless it weakens but not eliminate legal cost as a factor in price increase.

I put B because its more clear (offering more concrete alternative and has better "tone" condemning insurance company for being greedy) but OA is A. Hence I posted for discussion.
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by gmatmachoman » Thu Jul 29, 2010 1:06 am
gmatusa2010 wrote:Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explaination is wrong. Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.

Which of the following, if true, lends the greatest support to the editorial argument?

A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies

B) Because insurers are publicly traded companies that must meet profit goals, many increases in cost are folloed by an increase in prices that exceeds the amount of the cost increase by a fixed amount

The rest of the choices are irrelevant.

I got this wrong and I don't like the explanaition provider for the OA. To me this is a toss up. Inputs??

My analysis:

Conclusion: legal costs + outrageous awards = high insurance price IS wrong. Answer should prove this or stregthen why legal costs + outrageous awards does not contribute to high insurance.
hey there,

Editorialist claims that Percentage change Insurance Companies charges >> Percentage change in Legal Costs.

He supports his claim stating that Increase in Legal Costs are just a FRACTION of Increase in Insurance CHarges.

We are asked to support the editorialist claims.

Okay, one way of strengthening is to "Dismiss all other alternatives".

Option A says that Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by those companies.

In other words we can strengthen his claim if we consider/assume that Insurance Companies has NOT ACCOUNTED for future likely legal costs increases.

This may be a LSAT one...!!

B does NOT relate Legal Cost and Insurance Cost increases.

Always look for answers that try to " knot/bridge" around the gap between the premise stated and conclusion when it comes to strengthening of a argument/claim.
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by Shawshank » Thu Jul 29, 2010 1:40 am
IMO -- A
++++++++++++++++++++++++++++++
Shawshank Redemtion -- Hope is still alive ...
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by paes » Thu Jul 29, 2010 5:24 am
IMO B
I am not convinced with A.

Can some expert help on it.
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by gmatusa2010 » Thu Jul 29, 2010 6:33 am
Sounds like you think the conclusion is "Percentage change Insurance Companies charges >> Percentage change in Legal Costs." (I'm assuming your legal costs = legal costs + awards. Basically Revenue > Costs)

For me, my translation is that the insurance industry claims that increases in charges is due to increase in legal cost and cost of awards. . The editorialist actually claims and (therefore the main conclusion) that the insurance industry is wrong in that (the previous claim). Under my translation the "knot / bridge" is completely different.



gmatmachoman wrote:
gmatusa2010 wrote:Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explaination is wrong. Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.

Which of the following, if true, lends the greatest support to the editorial argument?

A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies

B) Because insurers are publicly traded companies that must meet profit goals, many increases in cost are folloed by an increase in prices that exceeds the amount of the cost increase by a fixed amount

The rest of the choices are irrelevant.

I got this wrong and I don't like the explanaition provider for the OA. To me this is a toss up. Inputs??

My analysis:

Conclusion: legal costs + outrageous awards = high insurance price IS wrong. Answer should prove this or stregthen why legal costs + outrageous awards does not contribute to high insurance.
hey there,

Editorialist claims that Percentage change Insurance Companies charges >> Percentage change in Legal Costs.

He supports his claim stating that Increase in Legal Costs are just a FRACTION of Increase in Insurance CHarges.

We are asked to support the editorialist claims.

Okay, one way of strengthening is to "Dismiss all other alternatives".

Option A says that Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by those companies.

In other words we can strengthen his claim if we consider/assume that Insurance Companies has NOT ACCOUNTED for future likely legal costs increases.

This may be a LSAT one...!!

B does NOT relate Legal Cost and Insurance Cost increases.

Always look for answers that try to " knot/bridge" around the gap between the premise stated and conclusion when it comes to strengthening of a argument/claim.
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by uwhusky » Thu Jul 29, 2010 7:06 am
Must be a "defender" question. What A offers is eliminating an alternative that insurance companies raised premium because of "future cost".

So A is a legitimate answer.

More information can be found in Powerscore Bible Chapter 8. The key here is recognizing what actually constitutes as "strengthening".

Please post all the answers to questions in the future, because they do serve a lot of benefits.
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by paes » Thu Jul 29, 2010 8:23 am
uwhusky wrote:Must be a "defender" question. What A offers is eliminating an alternative that insurance companies raised premium because of "future cost".

So A is a legitimate answer.

More information can be found in Powerscore Bible Chapter 8. The key here is recognizing what actually constitutes as "strengthening".

Please post all the answers to questions in the future, because they do serve a lot of benefits.
B also looks like a defender option.

Companies are working for profit and the amount increased is more than a fixed amount.
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by uwhusky » Thu Jul 29, 2010 8:34 am
I think the issue with B is "fixed amount", because if it's fixed amount, then the editorial has no ground for making the argument.

Why? If there is a layer above what the actual cost is and this layer is constant, or as in fixed amount, then the increasing level of insurance price would correlate the increasing legal cost. So unless the editorial argument is flawed, identifying that there is a layer of fixed priced profit does not strengthen the argument. If anything, it has the risk of weakening it.
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by gmatusa2010 » Thu Jul 29, 2010 10:03 pm
good point. i see what you are saying. u are drilling down and saying the conclusion is "rises/changes in legal costs is correlated with rises/changes in price." and B does not change anything because it actually shows an increase in cost is associated with an increase in price. i think that this is the correct analysis and logic.

however, you can apply the same analysis to A. A refers to future costs but it does not disassociate current legal costs from prices. So you can have a scenario whereby changes in Current/past legal costs + awards leads to changes in prices where future costs is not included but current costs is still influencing price. This DOES weaken but does not exonerate. I guess thats the moral of this problem. Weaken does not have to solve a logical issue. A definitely does not solve or disprove that legal costs is assocoiated with price.

In summation, A weakens by removing an alternative (future costs) but does not solve. However, B also removes an alternative (profit making) and also does not solve the problem. I still find it hard to pick one over the other. Both have its flaws and both does remove an alternative.




uwhusky wrote:I think the issue with B is "fixed amount", because if it's fixed amount, then the editorial has no ground for making the argument.

Why? If there is a layer above what the actual cost is and this layer is constant, or as in fixed amount, then the increasing level of insurance price would correlate the increasing legal cost. So unless the editorial argument is flawed, identifying that there is a layer of fixed priced profit does not strengthen the argument. If anything, it has the risk of weakening it.
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by uwhusky » Thu Jul 29, 2010 10:09 pm
I think you're making a lot of assumptions about A, more so than there is, which is flawed for tackling GMAT's CR.

You can only estimate future legal costs, because after all, it's the future. However, you can calculate existing costs by a fixed structure:

actual cost of whatever the insurance is covering

+

fixed layer of profit reflecting actual cost

=

total cost

So in order for the editorial to make the argument that insurance industry is basically charging whatever the heck they want without "reasons", he/she must have calculated all the fixed cost if such information is available. And since we are to assume all answers provided to be correct, then yes such information is available, and therefore it doesn't strengthen the argument.
Yep.
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by gmatusa2010 » Thu Jul 29, 2010 10:34 pm
Are you saying A resolves/disproves that prices is correlated with legal costs?
uwhusky wrote:I think you're making a lot of assumptions about A, more so than there is, which is flawed for tackling GMAT's CR.

You can only estimate future legal costs, because after all, it's the future. However, you can calculate existing costs by a fixed structure:

actual cost of whatever the insurance is covering

+

fixed layer of profit reflecting actual cost

=

total cost

So in order for the editorial to make the argument that insurance industry is basically charging whatever the heck they want without "reasons", he/she must have calculated all the fixed cost if such information is available. And since we are to assume all answers provided to be correct, then yes such information is available, and therefore it doesn't strengthen the argument.
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by uwhusky » Fri Jul 30, 2010 7:23 am
I fell asleep last night in the middle of explanation...
Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explanation is wrong.
Editor believes that the insurance industry did not charge more for insurance on the sole basis of covering the legal costs, and she cites her reason from the disproportional increase in the cost of insurance and in what she believes to be the legal cost.
Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.
However, she may have failed to account for the possibility that the increased cost is for "future" legal costs yet to be determined. A eliminates such possibility and by eliminating a possible alternative explanation to an argument, you have strengthen the argument. This is actually how GMAT works, and GMAT doesn't measure how much it strengthens as long as it does.
A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies
Yep.
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by FightWithGMAT » Fri Jul 30, 2010 1:34 pm
gmatusa2010 wrote:Editorial: The insurance industry claims that legal costs associate ith frivolous lawsuits and outrageous awards are responsible for skyrocketing price of insurance, but this explaination is wrong. Although it is true that legal costs incurred by insurance companies have increased at an accelerating rate over the past several years, these costs have increased at only a fraction of the rate at which the prices that insurance companies charge have increased.

Which of the following, if true, lends the greatest support to the editorial argument?

A) Prices charged by insurance companies do not take into accounts likely future increases in the legal costs incurred by thhose companies

B) Because insurers are publicly traded companies that must meet profit goals, many increases in cost are folloed by an increase in prices that exceeds the amount of the cost increase by a fixed amount

The rest of the choices are irrelevant.

I got this wrong and I don't like the explanaition provider for the OA. To me this is a toss up. Inputs??

My analysis:

Conclusion: legal costs + outrageous awards = high insurance price IS wrong. Answer should prove this or stregthen why legal costs + outrageous awards does not contribute to high insurance.
I read all the complicated discussions, making me confused why so intricate explanations.

Conclusion: Increase in the legal cost is not the justified reason that overall insurance cost is increasing.

A simple says that........Increase in the legal cost is not a part of calculations of overall costs.

B says (simple rephrase)....at some point in calculation....... increases in the costs derive increases in the insurance prices.

Actually B is a tricky weakener.
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