Suppose That Due to an Increase in the Price of Steel

question 54

Multiple Choice

Suppose that due to an increase in the price of steel, Chrysler had to raise prices on its automobiles, and as a result its sales declined. Due to the decline in sales, Chrysler chose to lay off some employees rather than cut employee wages because of an unspoken agreement between its employees and Chrysler executives that wages would not be reduced. This example is consistent with the

• A) relative-wage explanation of unemployment.
• B) implicit contract explanation of unemployment.
• C) explicit contract explanation of unemployment.
• D) efficiency wage explanation of unemployment.

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Definitions:

Insight

The capacity to gain an accurate and deep intuitive understanding of a person or thing, often leading to a breakthrough solution or realization.

Behavior

An individual's actions or reactions to stimuli, observable through various means and fundamental to the study of psychology.

Modeling

The process of learning behaviors by observing and imitating others.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly presented together, resulting in a conditioned response to a previously neutral stimulus.