Wanda hears a loud bang. She perceives it coming from the left of where she is standing because the sound level at the left ear was somewhat higher than the sound level at the right ear. What theory does this example demonstrate?

The reason why Wanda heard a different level of sound in the left and right ear is the interaural level difference. This is because the strength the sound on its path dissipates, if the sound source is very close, the sound level will be the same in both ears. But as the source of sound is distant, due to dissipation, there are different hearing perceptions in our ears. This is because our ears can detect the difference in the sound volume between the left and right ear, if the sound is distant the head casts an acoustic shadow, which changes the distribution of the volume and frequency in both ears.

The answer is "the interaural level differences"

The interaural level difference is the distinction in loudness and frequency circulation between the two ears. As sound voyages, its quality scatters. Incredibly, our ears can identify commotion contrasts between the left and right ears. In any case, more imperative for sound localization is that the head throws an acoustic shadow, which changes the uproar and recurrence conveyance of sound setting off to every ear.