Final answer:
Lee's emotional response of laughing uncontrollably after a near-accident best illustrates the spillover effect, where emotions from one event affect responses in another.
Step-by-step explanation:
The situation described illustrates the spillover effect. The spillover effect is a phenomenon where emotions from one situation can influence our responses to a new situation. This is different from the adaptation-level theory, which concerns how we adjust our expectations based on what we become accustomed to, and dual processing, which refers to the principle that we process information on both conscious and unconscious levels.
Instead, the spillover effect highlights how arousal from an earlier event, the near accident, influenced Lee's subsequent emotional response: laughing uncontrollably at the joke, despite the terror he had just felt. The cognitive appraisal of the situation is crucial, as introduced by the Schachter-Singer two-factor theory of emotion, wherein physiological arousal is given a cognitive label based on the context, leading to the emotional experience.