Digital SAT Reading and Writing Practice Question #542

Text 1 Late 19th-century marginalists revolutionized economic theory by discarding the classical labor theory of value, which posited that a good's value is derived from the objective labor required to produce it. Instead, they argued that value is inherently subjective, determined entirely by the marginal utility a consumer derives from the final unit of a good consumed. This framework elegantly explains the diamond-water paradox: water is essential but abundant, thus its marginal utility is low; diamonds are frivolous but scarce, conferring high marginal utility. Text 2 Behavioral economists have repeatedly demonstrated that consumers rarely maximize utility in the mathematically rigorous, consistent way that neoclassical models assume. Humans are beset by cognitive biases—we value losses far more heavily than equivalent gains, and our preferences are highly susceptible to arbitrary framing effects. Therefore, attempting to ground a universal theory of economic value solely in the subjective utility calculations of individual consumers is a project built on an idealized, rather than an empirical, conception of human cognition. How would the author of Text 2 most likely respond to the primary assertion made by the author of Text 1?