Gifts of cash or gift cards, which allow the recipient to choose

Question

Economist:  Gifts of cash or gift cards, which allow the recipient to choose the actual gift, are more highly valued by recipients than are gifts chosen for them by others. In a study, when people were asked how much they would have been willing to pay for gifts chosen for them by others, they responded by citing amounts that were on average only
about two-thirds of the actual price of the gifts.

Which one of the following, if true, most seriously weakens the economist's argument?

(A) The rate at which gifts are returned to retailers has been steadily increasing since the rate was first measured.
(B) Gifts of cash and gift cards currently represent only about 14 percent of all gift giving.
(C) People in the study would have been willing to pay more for gifts chosen for them by close friends and relatives than for gifts chosen for them by others.
(D) People are unwilling to sell gifts chosen for them by others unless offered about one and a half times the gift's actual price.
(E) Most retailers require receipts before people can return gifts for refund or exchange.

AnuK2222 · Answer

I had to solve this twice to get it right (sigh)
I think correct option is D
Conclusion: Gifts of cash or gift cards, which allow the recipient to choose the actual gift, are more highly valued by recipients than are gifts chosen for them by others
so conclusion says value of gift card/cash>> value of gift (does not say chosen by who)
X(A) The rate at which gifts are returned to retailers has been steadily increasing since the rate was first measured. steady inc in rate of return does not necessarily mean they value less it could be difference in taste/damages/size etc
X(B) Gifts of cash and gift cards currently represent only about 14 percent of all gift giving.- irrelevant, conclusion is about value
X(C) People in the study would have been willing to pay more for gifts chosen for them by close friends and relatives than for gifts chosen for them by others.-out of scope trap, this option compares gifts from two types of people BUT conclusion is cash/gift card vs gift
Correct(D) People are unwilling to sell gifts chosen for them by others unless offered about one and a half times the gift's actual price.- correct, this means perceived value of gift=1.5 price of gift, this is reverse of what the premise says, it would weaken the conclusion!
X(E) Most retailers require receipts before people can return gifts for refund or exchange- irrelevant

Hope this makes sense

ppoomm · Answer

I totally agreed on your explanation on D) - which is as same as how I arrived at the final answer. The passage said that people view the received gifts as 2/3 of the actual price. However, this choice points out that, actually, people value their gifts not only equal to the price tag but also beyond, indicating their willingness to sell is actually higher than the value told by the economist (since he compared monetary value of gift cards versus the value of actual gifts)

autemalias · Answer

Hello, I'm really confused now.

In reality, people want to buy at lower prices and sell at higher prices, so I think there's a price range between the two where they'd rather hold off on a decision than make a trade.
So to answer D, I think it requires the premise that the price people willing to sell the gift for is the same as the price they willing to buy it for, but that's not stated in the text.

And if we can assume conditions not stated in the text, wouldn't B also be a correct answer?
Because if gift cards were more appreciated, their usage rate would already be high.

ppoomm · Answer

First of all, the question stem asks you  “if true, weaken the most,”  which means that you need to connect the choices back to the story. And that choice must hurt the argument the most.

Proportion of gift type has no bearing on the argument.  We want to  weaken  the econ’s argument that   “Gift receivers (monetarily) value gift card than the actual gift... because the gift receivers say that they ‘would’ want the giver to pay only 2/3 of the actual value”

Now, B) says that   14% of people receiving gifts got gift cards as their present.   Does it have anything to do with how the receivers value their gift?

It just says that “ok... out of 100 receivers, only 14 received gift cards.”   Usage rate does not do anything in valuation.   What you’re saying is you’re trying to make up your own assumption to connect with the story that “higher usage leads (or even correlate) to higher value.” That’s unwarranted assumption.

Comparing this choice with D)

OK. Now, this attacks the econ’s argument. Recalling that he/she    makes a claim    that  receivers value gift cards over actual gift because  “...receivers ‘would’ want the giver to pay only just 2/3 of what they receive,”   in other words,  he/she says that receivers undervalued the monetary value of their gift.

The piece of info in   this choice says the opposite, which is what we want:  Receivers actually perceive gift to be more valuable than what the givers paid for   (as demonstrated in this choice in the way that they are unwillingly want to sell there gift unless it's x1.5 of the gift's actual price)

Let’s say the gift card and actual gift both values at $90. Here’s what could play out in this scenario:

Real gift  - actual price = $90,  econ's expectation = $60 ,   receiver perceived as $135

This shows that, if this is true (reality), it (the reality) goes against what the econ’s trying to claim.   That’s why this choice works.

Hope this helps!

Sajjad1994 · Answer

Explanation

Economist’s argument:

Premise:  In a study, people said they’d pay on average only two-thirds of the actual price for gifts chosen by others.

Conclusion:  Cash/gift cards (recipient chooses) are more highly valued than gifts chosen by others.

The reasoning assumes that the amount people say they’d pay reflects how much they value the gift.

Possible weakening idea: 
If people’s willingness-to-pay in the study underestimates their true value of the gift (for some reason), then the premise doesn’t support the conclusion.

(A)  Return rate increasing doesn’t directly address the valuation measure in the study.

(B)  This is irrelevant to the comparison of value.

(C)  but the economist’s data is an average; if some gifts are valued more, that doesn’t undermine the overall average being lower than price.

(D)   That means they value it more than its price, opposite of the  “willingness to pay”  result. This directly weakens: The study’s  “willingness to pay”  measure may not reflect true value because when asked to sell, they demand a premium. So maybe they value the gift more than its price, not less.

(E) This is irrelevant to valuation in the study.

Answer: D

Gifts of cash or gift cards, which allow the recipient to choose

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Gifts of cash or gift cards, which allow the recipient to choose

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