Shel and Fran Are Neighbors

Multiple Choice

Shel and Fran are neighbors. They work at the same firm and hold the same title. Shel finds that when Fran's consumption rises, Shel feels worse off. Fran feels the same way about Shel's consumption. Fran has bought a new Jaguar (a luxury car) , and shortly thereafter, Shel bought a new Mercedes (also a luxury car) . Shel and Fran seem to be:

A) making independent rational consumption decisions.
B) unaware of the other's actions.
C) involved in a positional arms race.
D) imposing external benefits on each other.