Economics focus: Is Santa a deadweight loss? Are all those Christmas gifts just a waste of resources? UE Section C 2004 MC Cloze

Economics focus: Is Santa a deadweight loss? Are all those Christmas gifts just a waste of resources? People often say that “it’s the thought that counts” when giving/receiving gifts. Do you agree? Is it a waste of money when someone receives a gift that they don’t like?

To many, economics has (17) been known as a gloomy science. A. even B. now C. long D. once Many people consider economics gloomy. It’s only surprising that economist would say bad things about Christmas. has ___ been known as” is an expression meaning “has been considered … for a long time”. C. long = correct

… seems to be a treat for those concerned with … GDP growth. After all, everyone (18). A. is spending B. spend C. is spent D. has spent Everyone = 3 rd person singular – X B People spend money. Need active voice – X C ??? It still seems (present tense) to be a treat, so it’s still happening now. A. is spending = Correct.

In America, (19) make 25% of their yearly sales and 60% of their profits between Thanksgiving and Christmas. A. retailers B. economists C. bargain-hunters D. shoppers Only one option makes sales and profits. A. retailers = correct.

(20), economists find something to worry about in the kind of purchases being made. A. Increasingly B. Anticipating this C. Even so D. Besides Such a big % of sales of profits should mean that X-mas is good for the economy. It is surprising that they can find something to worry about. C. Even so = correct.

(21) the holiday spending is on the gifts for others. A. The majority B. At most C. Much of D. Mainly for A. could be correct if we added “of” B. = maximum C. = A lot of D. cannot be correct because “for” seems to introduce the people we’re buying for. C. Much of = correct.

At the simplest level, giving gifts involves the giver (22) that the receiver would like. A. Thinking what thing B. thinks about the thing C. to think something D. thinking of something Giving gifts involves something. Cannot be B. or C.. D. sounds more natural. D. thinking of something = correct.

He tries to (23) her preferences, as economists say, and then buys the gift and delivers it. A. question B. inform C. search D. guess Preferences = the things she likes most. He doesn’t know what she likes, so he tries to … Only one obvious choice. D. guess = correct.

Even if a gift is enjoyed, it may not be what the receiver (24) had she spent the money herself. A. had bought B. would have bought C. may buy D. will buy The gift has already been bought, so it is not possible for her to spend the money herself. B. would have bought = correct.

Intrigued (25) this difference between wants and gifts, in 1993 economist Joel Waldfoel attempted to estimate the mismatch in dollar (26). A. from B. by C. to D. of Which preposition follows “intrigued”? B. by = correct.

Intrigued (25) this difference between wants and gifts, in 1993 economist Joel Waldfoel attempted to estimate the mismatch in dollar (26). A. bills B. charges C. terms D. notes This explains how he tried to estimate the mismatch. “in … ____” is an expression used to say that he looked at the problem from this particular perspective. C. terms = correct

His results were gloomy: on average, a gift was valued by the receiver (27) the price paid by the giver. A. much after B. much beneath C. well down D. well below Which sounds better with “price”? D. well below = correct N.B. “Well” is used for emphasis here and is more similar in meaning to “very” than “good”.

The most conservative (28) put the average receiver’s valuation at 90% of the buying price. A. estimate B. value C. vote D. voice This research involves people guessing the value of gifts. A. estimate = correct

The missing 10% is what economists (29) a deadweight loss: a waste of resources that could be avoided … A. mean B. state C. note D. call “Deadweight loss” is a term used by economists. It is the name they gave to a waste of resources that could be avoided. D. call = correct

Perhaps (30), the most efficient gifts (those with the smallest deadweight loss) were those from close friends and relations, … A. not surprisingly B. to contradict this C. subconsciously D. less economical Would you expect your best friend or mother to know what you would like for Christmas? Of course, so gifts from these people are more efficient. A. not surprisingly = correct.

… the most efficient gifts … were those from close friends and relations, (31) non-cash gifts from extended family were the least efficient. A. as if B. whereas C. although D. because We are comparing the most efficient gifts with the least efficient. Which conjunction is used to say that even though something is true of one thing, it is not true of another? B. whereas = correct.

All of this (32) what many grandparents already know: … the best present is (33) is totally flexible (cash) or very flexible (gift vouchers). A. criticises B. suggests C. contradicts D. determines Extended family members don’t know each other’s preferences. What does this fact make you think is the best gift from extended family? Cash. B. suggests = correct

…, the best present is (33) is totally flexible (cash) or very flexible (gift vouchers). A. which B. either C. one that D. for what In other words … The best present is a present that is totally flexible … C. one that = correct.