(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.
Answer: D
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What will be an ideal response?
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