Cognitive Ability and Domain Ability Assessment

Problem Statement

Section D: Cognitive Ability Read the following passage and answer the questions given below. According to statistics, people spend more than a billion dollars every month to find the perfect gift. While giving gifts is usually a joyful thing, it can leave the giver with ambivalent feelings. On the one hand, they might feel happy about finding a great gift to strengthen their relationship with the person receiving it. But on the other hand, they might feel anxious because they don't want to choose the wrong gift and disappoint the person. Social psychologists view giving gifts as a positive social tradition, while economists hold a different opinion. Economists often see gift-giving as a waste of resources without much benefit. This is because people tend to buy gifts that the person receiving the gift wouldn't buy for themselves or find too expensive (a phenomenon called 'deadweight loss'). For example, someone might spend $200 on a gift when the recipient would only spend $100 on it