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:

Person-situation Controversy

The debate surrounding whether behavior is more influenced by personality traits or situational factors.

Environments

Environments encompass all the external physical and social conditions that influence individuals or communities and their development.

Traits

Characteristics or qualities that form an individual's distinctive character or personality, often considered to be relatively stable over time.

Agreeableness

A personality trait characterized by trust, altruism, kindness, affection, and other prosocial behaviors.