If People Care About Relative Consumption Rather Than Absolute Consumption

question 87

Multiple Choice

If people care about relative consumption rather than absolute consumption, then:

• A)their behavior will be consistent with traditional economic models.
• B)there is little need for government intervention in markets.
• C)their choices will lead to an efficient allocation of resources.
• D)individuals' decisions need not lead to socially optimal outcomes.

---

Definitions:

Interdependence

A mutual reliance between individuals or groups, where actions, decisions, or outcomes are influenced by others within a relationship or system.

Entitativity

The perception or quality of being a distinct and unified group, characterized by similarities, shared goals, or common fate among its members.

Cohesiveness

Refers to the strength of the bonds among members of a group, which often helps in enhancing group performance and satisfaction.

Emergent

Describes phenomena or patterns that arise or develop in complex systems, often unexpectedly and without a singular entity controlling them.