Which Individual Would Likely Experience a Negative Contrast Effect

question 53

Multiple Choice

Which individual would likely experience a negative contrast effect?

• A) An airline pilot who must accept a 15 percent pay cut to help the airline avoid bankruptcy
• B) A truck driver who is fired when his drug test comes back positive for narcotics
• C) A bank teller who increases the number of times per week he is absent from work following a robbery
• D) A college professor who must grade exams from four classes during exam week and submit all grades to the registrar 48 hours after the last exam

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Definitions:

Normal Goods

Goods for which demand increases as the income of the consumer increases, and falls when the consumer's income decreases.

Cross Elasticity of Demand

measures how the quantity demanded of one good responds to a change in the price of another good, indicating substitutes or complements.

Substitute Goods

Products or services that can be used in place of each other because they fulfill similar needs or desires, often influencing the demand and price of goods.

Income Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in consumers' income.