If a Worker's Desired Hours of Labor Do Not Change

question 1

Multiple Choice

If a worker's desired hours of labor do not change after a decrease in his wage rate,then

• A) his income effect dominates his substitution effect.
• B) his substitution effect dominates his income effect.
• C) his income and substitution effects are of equal magnitude.
• D) his income and substitution effects are small in absolute value.

---

Definitions:

Perceptual Set

A psychological framework that influences how we perceive and interpret sensory information based on our expectations, culture, and past experiences.

Top-Down Processing

The operation in sensation and perception, launched by cognitive processing at the brain’s higher levels, that allows the organism to sense what is happening and to apply that framework to information from the world.

Absolute Threshold

The minimum intensity of stimulation that must occur before you experience a sensation.

Sensory Threshold

The minimum level of stimulus intensity needed for a stimulus to be detected, marking the boundary between the sensory signal's absence and presence.