If social motives for both consumption and positional goods are important, …

If social motives for both consumption and positional goods are important, …

a. “More is better” applies at the individual level but not the societal level.

b. “More is better” applies at the societal level but not the individual level.

c. An increase in my neighbours’ consumption increases my utility.

d. An increase in my neighbours’ consumption has no effect on my utility.

e. It still cannot explain the success of the Kardashians.

Solutions

Expert Solution

The answer is (a)

If social motives for both consumption and positional goods are important, an increase in consumption (more) at the societal level is not necessarily better as the value from the positional good - a good that gives utility due to the exclusive use (status symbol) will decrease as everyone has it. Thus, the more is better may not generally at the societal level although it always holds at the individual level

All other options are incorrect as they do not convey the correct representation of the statement,

Rahul Sunny answered 2 years ago

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