Use the Following to Answer Questions

question 101

Multiple Choice

Use the following to answer questions:
Figure: Rita's Time Allocation Budget Line
-(Figure: Rita's Time Allocation Budget Line) Look at the figure Rita's Time Allocation Budget Line. It is based on 80 hours available for labor and leisure. Rita chooses 40 hours of leisure and income of $280. When her hourly wage doubles, Rita chooses 30 hours of leisure and income of $700. The substitution effect is making her work _____, the income effect is making her work _____, and the substitution effect is _____ than the income effect.

• A) more; less; stronger
• B) less; more; stronger
• C) more; less; weaker
• D) less; more; weaker

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Definitions:

Information Processing

A theory describing the mental processes involved in the perception, storage, and manipulation of information.

Conscious Processing

The mental activities that involve awareness and attention in the processing of information.

Unconscious Processing

The mental activities of which individuals are not aware but that influence emotions, judgments, and behaviors.

Insomnia

A sleep disorder characterized by difficulty falling asleep, staying asleep, or obtaining restorative sleep, leading to daytime impairment.