If Alan Shaw Reduces His Work Hours When His Salary

question 66

Multiple Choice

If Alan Shaw reduces his work hours when his salary increases, then

• A)the income effect of his salary increase dominates the substitution effect.
• B)the substitution effect of his salary increase dominates the income effect.
• C)the income effect of his salary increase is completely offset by the substitution effect.
• D)leisure is an inferior good to Alan.

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Definitions:

Prime

In a mathematical context, a prime number is a natural number greater than 1 that has no positive divisors other than 1 and itself.

Further Processing

The additional analysis, treatment, or refinement that materials, information, or ideas undergo after initial handling.

Stimulus

Anything that can elicit a physiological or psychological response or reaction in an organism.

Gain-framed Appeal

Persuasive communication emphasizing the positive benefits or outcomes of adopting a certain behavior or stance.