When the Wage Rate Rises,the Substitution Effect Leads a Worker

question 64

Multiple Choice

When the wage rate rises,the substitution effect leads a worker to

• A) increase consumption while the income effect leads to a decrease in consumption.
• B) decrease consumption while the income effect leads to an increase in consumption.
• C) increase consumption,as does the income effect.
• D) substitute sleep for other leisure.

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Definitions:

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any prior learning.

Primacy of Affect

The principle that emotional responses can occur before detailed cognitive processing of stimuli, influencing perception and judgment.

Emotion Requires Cognition

The theory that cognitive processing of information is necessary before an emotional response can be triggered.

Appraisal

The process of evaluating and interpreting environmental stimuli, which plays a significant role in emotional responses and decision making.