Asked by Ashwin Ponukumati on Jun 08, 2024
Verified
(Consider This) Kara was earning $40,000 per year.When her income rose to $60,000 per year,she enjoyed the higher level of consumption for a while,but eventually she was no more happy than when she earned $40,000 (assume prices didn't change over this time period) .Economist Richard Easterlin described this as:
A) anchoring.
B) the endowment effect.
C) irrational economic behavior.
D) the hedonic treadmill.
Hedonic Treadmill
A concept suggesting that people consistently return to a relatively stable level of happiness despite major positive or negative events or life changes.
Richard Easterlin
An economist known for the Easterlin Paradox, which posits that people's happiness does not necessarily increase as their country's economy grows.
- Comprehend the principle of the hedonic treadmill and its consequences on economic prosperity.
Verified Answer
MS
Monikpal SinghJun 09, 2024
Final Answer :
D
Explanation :
This is an example of the hedonic treadmill, which refers to the idea that people adapt to increases in income or consumption and eventually return to their previous level of happiness. This can lead to a perpetual cycle of striving for more income or consumption in the pursuit of happiness, but ultimately finding that it does not bring lasting satisfaction.
Learning Objectives
- Comprehend the principle of the hedonic treadmill and its consequences on economic prosperity.