Final answer:
The lake effect occurs when cold air passes over warmer water, picking up moisture and heat, leading to cloud formation and precipitation. The correct answer is cold; warmer.
Step-by-step explanation:
The lake effect occurs when a cold air mass moves over a warm body of water. The contrast between the cold air and the warm water causes the air to pick up moisture and heat, leading to increased cloudiness and precipitation downwind of the water body. This phenomenon is particularly common in areas near large lakes such as the Great Lakes region during the fall and winter months, where the water retains heat longer than the surrounding land.