LSAT 152 | Section 4 | Logical Reasoning: Q22

LR Question 22 Explanation

QUESTION TEXT: Economist: Gifts of cash or gift cards, which allow the recipient …

QUESTION TYPE: Weaken

CONCLUSION: People like cash and gift cards more than gifts chosen by others.

REASONING: People were asked how much they’d pay for gifts chosen for them by others. The answers were usually only 2/3 of the actual price.

ANALYSIS: Let’s say you gift me a wallet. I would only pay $40 for it. It actually cost you $60.

Does that mean I didn’t like the wallet? No. Does that mean I’d rather have you give me cash? I could have still loved it, I just wouldn’t have paid that much myself.

Willingness to pay is not necessarily the same thing as how much you value a gift after receiving it. People may be reluctant to buy something for themselves at full price but still value it highly once it is given to them.

We want the answer to show that recipients may place a high value on chosen gifts even if they report a low willingness to pay for them.

___________

1. Increasing return rates sounds relevant at first, but it’s pretty loose. People can return gifts for lots of reasons, and the answer does not compare chosen gifts to cash or gift cards.
2. This tells us how common cash and gift cards are, not whether they are valued more highly. Popularity is not the same as value.
3. We have no reason to believe that “others” in the stimulus doesn’t already include friends and family.
4. CORRECT. If people would only sell these gifts for 1.5x the actual price, then clearly they value them highly.
5. Receipts may affect returns, but they don’t tell us anything about how people value the gifts.