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What is the concept of conspicuous consumption in Veblen's theory?

  1. Buying goods for personal happiness

  2. Consuming goods that increase people's social status

  3. Purchasing necessities for survival

  4. Spending on local products

The correct answer is: Consuming goods that increase people's social status

The concept of conspicuous consumption, as articulated by Thorstein Veblen, refers specifically to the practice of consuming goods primarily to enhance one’s social status rather than for their intrinsic value or utility. Veblen posited that individuals often choose to buy luxury items and status-oriented goods in order to display wealth and social standing to others. This behavior highlights the social aspect of consumption, where the act of purchasing is as much about demonstrating one's status as it is about fulfilling personal needs or wants. In Veblen's view, conspicuous consumption is a means of signaling status and is often seen in affluent societies where individuals engage in conspicuous displays of wealth through the acquisition of expensive items that are not necessarily essential. The fundamental motivation behind this form of consumption is the desire for distinction and recognition among peers and society at large. Thus, purchasing goods that effectively communicate one’s wealth and position within the social hierarchy captures the essence of conspicuous consumption as defined within Veblen's theory.