Assignment:
Those of you who incorporate a sound and logical usage of the concepts we have learned in this class will likely receive full credit. Those of you who do not will likely receive only partial credit. In the end, I am interested in discovering your ability to assimilate the information and the knowledge you have acquired from this elm and thoughtfully apply it to the question.
Your response to both parts of the question should be no less than one page and no more than two pages (typed and double-spaced) in length. I believe this is enough room for you to provide your answer and your reasoning without being overly verbose or too truncated. Responses that are less than one page in length will only receive partial credit.
By the way, you can use this question (along with your response) at the next party or social occasion you nay attend you will definitely be the hit of the party! I guarantee it!!
Question
Part One:
Say you just won $100 million playing the lottery yesterday! Congratulatiols!! And let's assume you decide to receive your winnings in a one lump-sum payment. So, figure after taxes are paid, you are now holding around $50,000,000 in your hands. Careful! You might throw your back out carrying all that money around! You might want to contact your favorite Economics instructor and have him cony it around for you....or not!
At any rate, let's say you have deposited the $50 Million in your incredibly grateful local bank. Now what? Would your spending habits and the way you think about and select goods and services change compared to the way it was before you won the lottery? What types of goods ..would you buy and in what quantities? Why? Please explain in as much detail as possible.
Part Two:
If indeed your spending habits did change, perhaps purchasing more luxury goods and so forth, would your happiness toward life change? In other words, are you now happier surrounded with all your money and all those sumptuous luxury goods and services? If happiness, to a certain degree, is dependent on consuming material things, how long do you think you would be able to remain just as happy (or become happier) by continually buying more and more goods? Two years? Five years? Ten years? One week? Please explain in as much detail as possible.
Finally, I want you to really imagine yourself as one of the nouveau riche. In other words, put yourself in those "future shoes." Would you really be happier driving around in a Ferrari or a Rolls Royce, wearing only designer clothes and fine jewelry, sailing around in a ridiculously expensive yacht, having a membership at the most exclusive country clubs, and dining every night at the ,flost expensive restaurants? Even if you were happier initially, wouldn't that get "old" after a while? Please explain using concepts that we have discussed in this course.
Please note: In order to receive full credit, please include in the support of your answers things such as the Principle of Diminishing Marginal Utility; marginal utility; income elasticity of demand; the concepts of nvnial, inferior and lurury goods, the concepts of "Hedonic Adaptation" and "Habituation," and how you might change your perception of life and happiness by winning this large sum of money.