Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Aug 2710:00 AM EDT
-11:00 AM EDT
We’ve worked incredibly hard to build TTP into the best test prep experience possible, and it would mean a lot to us to win Newsweek’s 2026 Readers’ Choice Award for Best Test Prep. If TTP has helped you, we’d be incredibly grateful for your vote.
Sep 0201:00 PM EDT
-11:59 PM EDT
Take 30% off all study plans with code COURSEWORK - Expires on Monday 9/7
Sep 0410:00 AM PDT
-11:00 AM PDT
What does test anxiety really look like on the GMAT? For many test takers, it does not look like a panic attack. Instead, it shows up as brain fog, rereading, negative comparisons, mental noise....
Sep 0609:30 AM EDT
-12:30 PM EST
Top scores are possible when you enroll in a powerful EA course, taught live online + 6 months access to TTP OnDemand video courses included! Perfect class schedule and easy course access for working professionals. Class starts Sundays Sept. 6, 2026.- Sep 07
12:01 AM PDT
-11:59 PM PDT
On the 7th, GMAT Club Tests will be Free! Including all the Quizzes, Questions, and Tests. 12 AM - 11:59 PM PDT - Sep 09
07:00 AM PDT
-10:00 AM PDT
Meet AdComs and explore top Master’s programs - MiM, MiF, MSc, MSBA and more. - Application Fee Waivers - Free 1-Week of GMAT Club Tests: - Master's Application Toolkit - Grand Prize Giveaway 
Sep 1507:00 PM EDT
-09:00 PM EST
Elite scores are possible when you enroll in a powerful GMAT course, taught live online + 6 months access to TTP OnDemand video courses included! Class starts Tues/Thurs Sept. 15, 2026 - Nov. 15, 2027, 7:00pm-9:00pm EST
Sep 2108:00 PM EDT
-10:00 PM EDT
Boost your GMAT score in less than one month in a live online class + 6 months access to TTP OnDemand video courses included! Class starts Mon, Tues, Wed, Thur, Fri Sept. 21, 2026 - Oct. 9, 2027, 7:00pm-10:00pm EST
The Chicago School of economics gained ascendancy in the 1950s and became the prevailing way of thinking about capitalist economics, first in the United States and eventually in many Western countries. A dominant subset of “Neoclassical economics,” the Chicago School fine-tuned many of the fundamentals of the larger movement and articulated tenets now generally taken for granted in economic thought.
A basic principle of Neoclassical economics is the concept of utility, or the assertion that a correct economic decision is one that yields “the greatest good for the greatest number.” Neoclassical economics vociferously defends a laissez-faire, or “hands off,” approach to government regulation. According to Neoclassical theory, in the absence of state interference, individual participants in the market will make rational economic decisions that maximize their satisfaction. For individuals, the principle of utility translates into buying quality goods at the lowest possible price; for companies, it means making decisions that will maximize profits.The interplay of free market forces, according to Neoclassical economists, will result in greater good – in the form of high quality products and services – for a greater number of people.
The Chicago School accepts the principles of utility and laissez-faire regulation, but tailors its understanding of these terms to focus on the related principle of “efficiency.” For Chicago School thinkers, “efficiency” subsumes Neoclassical thought on the mechanisms of utility, which concentrates on individuals making individual rational decisions, into a more sophisticated awareness of the balance between individual decisions and production. The chief cause of inefficiency for Chicago School thinkers is government regulation, which prevents the free interplay of market forces. In an economy unencumbered by state interference, not only are individuals and companies free to maximize their satisfaction, but production itself is likely to become more efficient by producing the highest quality goods at the lowest possible price.
According to the passage, which of the following best articulates the relationship of utility to efficiency?
A. Utility is concerned with maximizing satisfaction, whereas efficiency is concerned with greater production.
B. Utility is the basic principle, whereas efficiency is a more refined version of the basic principle.
C. Utility and efficiency are equally important concepts in Neoclassical economic theory.
D. Utility and efficiency, though opposite in meaning, are both useful in describing the statistical behavior of free markets.
E. Neither utility nor efficiency, as a principle, is able to completely predict the behavior of a free market.
A basic principle of Neoclassical economics is the concept of utility, or the assertion that a correct economic decision is one that yields “the greatest good for the greatest number.” Neoclassical economics vociferously defends a laissez-faire, or “hands off,” approach to government regulation. According to Neoclassical theory, in the absence of state interference, individual participants in the market will make rational economic decisions that maximize their satisfaction. For individuals, the principle of utility translates into buying quality goods at the lowest possible price; for companies, it means making decisions that will maximize profits.The interplay of free market forces, according to Neoclassical economists, will result in greater good – in the form of high quality products and services – for a greater number of people.
The Chicago School accepts the principles of utility and laissez-faire regulation, but tailors its understanding of these terms to focus on the related principle of “efficiency.” For Chicago School thinkers, “efficiency” subsumes Neoclassical thought on the mechanisms of utility, which concentrates on individuals making individual rational decisions, into a more sophisticated awareness of the balance between individual decisions and production. The chief cause of inefficiency for Chicago School thinkers is government regulation, which prevents the free interplay of market forces. In an economy unencumbered by state interference, not only are individuals and companies free to maximize their satisfaction, but production itself is likely to become more efficient by producing the highest quality goods at the lowest possible price.
According to the passage, which of the following best articulates the relationship of utility to efficiency?
A. Utility is concerned with maximizing satisfaction, whereas efficiency is concerned with greater production.
B. Utility is the basic principle, whereas efficiency is a more refined version of the basic principle.
C. Utility and efficiency are equally important concepts in Neoclassical economic theory.
D. Utility and efficiency, though opposite in meaning, are both useful in describing the statistical behavior of free markets.
E. Neither utility nor efficiency, as a principle, is able to completely predict the behavior of a free market.
07 Aug 2026, 09:31
Kudos
Bookmarks
Explanation
To answer this question, an understanding of the terms utility and efficiency as they are used in the passage is required. The second paragraph discusses the definition of utility as an economic decision that yields the greatest good for the greatest number. The first sentence of the second paragraph states that the Chicago School accepts this definition of utility, but has refined it and added other subtleties to it, so that the School’s major apparent concern is with efficiency.
A. According to the passage, utility and efficiency are aspects of the same concern with maximizing satisfaction through greater production; this answer choice presents a redundant sentence.
B. Correct. This option correctly identifies the connection made in the passage between the ideas of utility, the basic principle associated with Neoclassical economics, and the same principle refined by the Chicago School and discussed as efficiency.
C. Efficiency is not discussed in the passage as being a major component of Neoclassical theory.
D. Utility and efficiency are not opposite in meaning.
E. Whether or not utility and efficiency can predict the behavior of a market is outside the scope of this passage.
The correct answer is B
To answer this question, an understanding of the terms utility and efficiency as they are used in the passage is required. The second paragraph discusses the definition of utility as an economic decision that yields the greatest good for the greatest number. The first sentence of the second paragraph states that the Chicago School accepts this definition of utility, but has refined it and added other subtleties to it, so that the School’s major apparent concern is with efficiency.
A. According to the passage, utility and efficiency are aspects of the same concern with maximizing satisfaction through greater production; this answer choice presents a redundant sentence.
B. Correct. This option correctly identifies the connection made in the passage between the ideas of utility, the basic principle associated with Neoclassical economics, and the same principle refined by the Chicago School and discussed as efficiency.
C. Efficiency is not discussed in the passage as being a major component of Neoclassical theory.
D. Utility and efficiency are not opposite in meaning.
E. Whether or not utility and efficiency can predict the behavior of a market is outside the scope of this passage.
The correct answer is B
