Suppose That an Individual Has Chosen Not to Work

question 24

Multiple Choice

Suppose that an individual has chosen not to work.Then a change in the wage rate:

• A) creates a substitution effect, but no income effect.
• B) creates an income effect, but no substitution effect.
• C) creates both and income and substitution effect.
• D) creates neither an income effect nor a substitution effect.

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Definitions:

Egocentrism

A cognitive bias where individuals perceive the world primarily from their own perspective, often failing to understand or acknowledge others' viewpoints.

Middle Childhood

The developmental stage from approximately 6 to 12 years of age, encompassing early school years and characterized by significant growth in cognitive, emotional, and social domains.

Universal Sequence

A consistent order or pattern that events, stages, or processes follow across different contexts or populations.

Cultural Variation

Differences in norms, values, beliefs, and practices among various cultures.