The price effect is equal to the
A) substitution effect.
B) substitution effect plus the income effect.
C) marginal rate of substitution minus relative prices.
D) substitution effect minus the income effect.
B
You might also like to view...
In behavioral economics, the endowment effect refers to
A) most people believe that most wealthy people inherit their wealth. B) many people would be indifferent between being endowed with money or knowledge. C) many people place a higher value on what they own than when they consider purchasing. D) most people respond to tax incentives to provide an endowment for their children.
Suppose the local market for legal services has an upward sloping supply curve, PL = 150 + 0.0001QL where PL is the price of legal services and QL is the number of hours of legal services
If the equilibrium price of legal services is $250 per hour, what is the aggregate economic rent earned by lawyers in this market? A) $50,000 B) $1,000,000 C) $50,000,000 D) $100,000,000