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Associated with the growth of “commercial society” was the growth in luxury spending. Both Christian and...

Associated with the growth of “commercial society” was the growth in luxury spending. Both Christian and Civic Republican thinkers made this a prime reason for criticizing the emerging market economy. On what grounds did each object to luxury spending? Later thinkers both defended luxury spending on various grounds and/or found different reasons for concern about it. Compare and contrast the diverse positions on this issue of the thinkers we have read about, especially Mandeville, Hume, Voltaire, Smith, Malthus. Finally, what would neoclassical economics have to say about this issue? E.g, are there any efficiency grounds to worry about luxury spending? Can luxury goods be distinguished from necessities?

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Expert Solution

The growth in commercial society due to the improvement of commercial activities leads to the change of buying pattern of people very much. The situation of business prosperity make them to think towards the achievement of luxury items like gold , diamond , luxury cars ...etc. After the recession the economy starts to work with its previous power there is a situation arise that every one getting job and they will starts to earn more money than need so as a human they try to improve their living standard and the excess money the used to buy luxury products. They want to showcase their life with happy and prospirity. The prime objectives for purchasing luxury products is for showcase their life in to the society later it changed to like prastige issue.

Neoclassicals says that people have rational preferance between outcomes that can be identified and associated with values. Individual maximize utility and firm maximize profit.

Necessity goods are the goods and services that consumer will buy regardless of the changes in their income level.

Luxury goods are the goods it's consumption depends upon the income level of customer.

Rahul Sunny answered 2 years ago
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