A Wage Increase Creates a Substitution Effect Which Leads the Worker

question 25

Multiple Choice

A wage increase creates a substitution effect which leads the worker to desire ________ leisure,and an income effect which leads the worker to desire ________ leisure.

• A) more; less
• B) less; more
• C) less; less
• D) more; more

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Definitions:

Unconditioned Response

A natural, instinctive response to a stimulus that happens without any previous learning or conditioning.

Conditioned Stimulus

An initially neutral stimulus that, after being associated with an unconditioned stimulus, comes to trigger a conditioned response.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.

Edward Thorndike

An American psychologist known for his work in comparative psychology and the law of effect.