Rank-order the following three gifts in terms of potentially providing the highest utility to the lowest: 1)A new video game; 2)A gift card to a video game store; 3)Cash.

Question

Quizplus · Accepted Answer

Cash has the highest potential utility as it can be used for any purpose, not just for purchasing video games. Gift card to a video game store has medium utility as it can only be used at a specific store to purchase video games. A new video game has the lowest potential utility as it provides only entertainment and pleasure, which are not essential needs. Therefore, the rank order from highest to lowest utility is 3 (cash), 2 (gift card), and 1 (new video game).

Rank-Order the Following Three Gifts in Terms of Potentially Providing