If the Income Effect Is Equal to the Substitution Effect

question 118

Multiple Choice

If the income effect is equal to the substitution effect, the labor supply curve

• A) is horizontal.
• B) is vertical.
• C) has a negative slope.
• D) has a positive slope.

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Definitions:

Classical Conditioning

Gaining understanding through linking an environmental stimulus with a stimulus that occurs inherently.

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, eventually triggers a conditioned response.

Classical Conditioning

A conditioning technique where two stimuli are repeatedly connected; the reaction, at first prompted by the second stimulus, ultimately becomes prompted by only the first stimulus.

Unconditioned Stimulus (US)

A stimulus that naturally triggers a response without the need for prior learning.