Reading Comprehension

PT140 · S4 · P2 · Q8 Online Game Currencies

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Passage A is from a source published in 2004 and passage B is from a source published in 2007.

Topic

The real-world economic implications of virtual items and currency in multiplayer online games, and how they relate to taxation.

Framework

Present Debate (Passage B) / Highlight Noteworthy (Passage A)

Main Point

Passage A highlights how virtual economies in online games have real-world value and mimic economic systems. Passage B delves into the legal and policy debate about whether—and how—virtual wealth and transactions should be taxed, ultimately arguing for taxing only real-world cash exchanges, not in-game accumulation or trades.

P1 (A): Introduction to Multiplayer Online Games

Online games let players take on fantasy roles like warriors and quest together, creating a lively digital world where their avatars interact.

P2 (A): Discovery of In-Game Economies

An economist, Edward Castronova, discovered that these games feature complex economies where players generate and trade virtual goods, gaining wealth over time.

P3 (A): Player Auctions

Castronova noticed players sometimes sold their virtual items for real money in online auctions when they got tired of the game.

8.

Which one of the following most accurately expresses how the use of the phrase "skinning animals" in the final sentence of passage A relates to the use of the phrase "fish pulled from the ocean" in the second to last sentence of the third paragraph of passage B?

  1. The former refers to an

    Unsupported Comparison: Not a Distinction

    Both activities can be done for pleasure (playing video games / goin' fishin') or for money (selling your video game assets or the fish you caught for real money). Both increase your noncash wealth, and if you sell them, they both increase your cash wealth.

    6% picked this

  2. Correct

    The former refers to an

    Why this is right

    We know that the 'skinning pelts' was a reference to an online game and that 'fish pulled from the ocean' was referring to that literal activity in the real world. And the cases were analogous in the sense that intuitively we feel like you shouldn't be taxed for the noncash value of skinning pelts / pulling fish, if it's just your work done for your pleasure. But if you sell either of them for cash, then we can tax ya.

    Skill tested: Local Purpose · how this choice captures the passage's function is the move to repeat next time.

    75% picked this

  3. The former, unlike the latter,

    Unsupported Comparison: Not a Distinction

    The author of B has similar feelings towards both. They shouldn't be taxed in general, but if they are sold, then they should be taxed. Passage B says in the middle of his 2nd paragraph: Loot acquisitions (skinning pelts) in game worlds should not be treated as taxable, but rather should be treated like other property that requires effort to obtain, such as fish pulled from the ocean, which is taxed only upon sale.

    6% picked this

  4. The latter, unlike the former,

    Unsupported Comparison: Not a Distinction

    The author of B has similar feelings towards both. They shouldn't be taxed in general, but if they are sold, then they should be taxed. Passage B says in the middle of his 2nd paragraph: Loot acquisitions (skinning pelts) in game worlds should not be treated as taxable, but rather should be treated like other property that requires effort to obtain, such as fish pulled from the ocean, which is taxed only upon sale.

    5% picked this

  5. Both are used as examples

    Unsupported Comparison: Not a Commonality

    The mention of pulling fish from the ocean was one about the real world. The author was telling us about what precedent there is in tax law surrounding acquisition of noncash value, for items outside of game worlds. Passage B says in the middle of his 2nd paragraph: Loot acquisitions in game worlds should not be treated as taxable, but rather should be treated like other property (outside game worlds) that requires effort to obtain, such as fish pulled from the ocean.

    9% picked this

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