If the Wage Rate Increases,the Substitution Effect Gives a Household

question 3

Multiple Choice

If the wage rate increases,the substitution effect gives a household the incentive to

• A)raise its reservation wage.
• B)increase leisure and decrease work.
• C)increase work and decrease leisure.
• D)increase both work and leisure.
• E)decrease both work and leisure.

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Definitions:

McClelland's Theory

A motivational theory that categorizes needs into three primary types: the need for achievement, the need for affiliation, and the need for power, influencing individuals' motivations and behavior.

Need of Achievement

A personal motivation drive to accomplish tasks, meet high standards, and work towards the success of goals.

Maslow

Refers to Abraham Maslow, a psychologist known for creating Maslow's hierarchy of needs, a theory in psychology about human motivation.

Alderfer

Refers to Clayton Alderfer's ERG theory, which categorizes human needs into three groups: existence, relatedness, and growth.