Question

Candy Inc. offers two health insurance plans to its employees. Under the fixed plan, each employee pays $100 per month towards his or her health insurance premium. Under the variable plan, each employee pays $110 per month towards his or her health insurance premium and is entitled to a rebate of $20 in any month he or she attends 10 or more fitness classes at the company gym. Data from the company gym show that over the last year each employee in the variable plan attended an average of 12 fitness classes per month while each employee in the fixed plan attended an average of 6 fitness classes per month. Company executives claim these results demonstrate that even modest financial incentives can motivate people to change their fitness behavior.

Which of the following, if true, most seriously undermines the executives’ reasoning?

(A) Last year, Candy Inc. gave all employees wearable fitness tracking devices, and studies have shown that wearing such devices encourages increased activity levels.

(B) Average healthcare costs per person were no lower for employees in the variable plan than for employees in the fixed plan.

(C) Jogging for 30 minutes results in greater cardiovascular fitness benefits than does attending a fitness class.

(D) Some employees in the variable plan did not attend enough classes each month to qualify for the rebate.

(E) Employees of Candy Inc. are allowed to select between the fixed and variable plans at the beginning of each year.

Answer 1

(C) Jogging for 30 minutes results in greater cardiovascular fitness benefits than does attending a fitness class.

Step-by-step explanation:

If jogging for 30 minutes is more beneficial health wise than participating in a fitness class, there wouldn't be any need to invest in any plan that gets one fitness benefits as running for 30 minutes which comes for for free helps give greater cardiovascular fitness benefits. The executives reasoning about incentives motivating people to work out regularly would be undermined