Even Though Conspicuous Consumption Can Serve as a Credible Signal

question 39

Multiple Choice

Even though conspicuous consumption can serve as a credible signal of ability, it can lead to socially inefficient outcomes because:

• A)conspicuous consumption has been demonstrated to be poorly correlated with ability.
• B)conspicuous consumption is not highly correlated with earnings.
• C)conspicuous consumption can lead to positional arms races.
• D)earnings and ability are very poorly correlated.

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Definitions:

Definite Offer

An offer that is clear, specific, and leaves no room for negotiation, often containing all the terms necessary for an enforceable agreement.

Definite Acceptance

Definite Acceptance refers to an unambiguous agreement by the offeree to meet the terms of the offer, forming a binding contract.

Material Terms

essential and significant conditions and clauses in a contract that are so important that any breach of them would justify the termination of the contract.

Termination

The act of ending an employment relationship or contract, either voluntarily by resignation or retirement, or involuntarily by dismissal or layoff.