Suppose Inter-City Bus Travel Is a Substitute for Transportation by Train

question 368

Multiple Choice

Suppose inter-city bus travel is a substitute for transportation by train. Which of the following could then be TRUE?

• A) The cross elasticity between bus and train travel could equal 0.65.
• B) The cross elasticity between bus and train travel could equal 1.0.
• C) The cross elasticity between bus and train travel could equal 1.25.
• D) All of the above could be true.

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Definitions:

Overjustification Effect

The tendency for salient rewards or threats to lead people to attribute the reason, or justification, for engaging in an activity to an external factor, which thereby undermines their intrinsic motivation for and enjoyment of the activity.

Intrinsic Enjoyment

The pleasure and satisfaction derived from engaging in an activity for its own sake, without any external rewards or pressures.

Extrinsic Reward

A reward that comes from an external source rather than from the intrinsic pleasure of the activity itself.

Overjustification Effect

A psychological effect whereby externally provided rewards can reduce a person's intrinsic motivation to perform a task, because the person comes to attribute their actions to the external rewards rather than their own interest in the task.