If you purchase a gift worth $12 for your sister, but your sister would be willing to pay only $8 if she bought the item for herself, then the
A)total utility of the gift is $20.
B)total utility of the gift is $4.
C)marginal utility of the gift is $4.
D)loss of value in the gift is $4.

Question

Quizplus · Accepted Answer

The loss of value in the gift is $4 because your sister values the gift at $8, but you paid $12 for it, resulting in a $4 difference in perceived value.

If You Purchase a Gift Worth $12 for Your Sister