The Substitution Effect of a Change in the Wage Rate

question 197

Multiple Choice

The substitution effect of a change in the wage rate refers to _____

• A)substituting leisure for work as the wage rate rises.
• B)substituting market work for nonmarket work as the wage rate falls.
• C)working more hours as the wage rate falls.
• D)working fewer hours as the wage rate rises.
• E)substituting market work for leisure or nonmarket work as the wage rate rises.

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Definitions:

Entitleds

Individuals who believe they deserve preferential treatment and are overly self-centered in their relations with others.

Negative Inequity

A perception of unfairness experienced when an individual perceives they have received less in comparison to others, despite similar input or effort.

Equity Theory

A theory of motivation that focuses on the fairness of how rewards and resources are distributed within social groups or organizations.

Equity Theory

A theory in social psychology that explains how individuals perceive and react to fairness or unfairness in distribution of resources within their interpersonal relationships.