As wage rates rise to extremely high levels,
A. the income effect becomes stronger than the substitution effect.
B. the substitution effect becomes stronger than the income effect.
C. both the income effect and substitution effect become stronger.
D. both the income effect and substitution effect become weaker.
A. the income effect becomes stronger than the substitution effect.
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The above figure shows the U.S. market for 1 carat diamonds. With free trade, Americans buy ________ diamonds and pay a price of ________ per diamond
A) 300,000; $4,000 B) 500,000; $4,000 C) 700,000; $3,000 D) 300,000; $3,000 E) 900,000; $2,000
Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay ________ for a sandwich, she ________
A) $4.00; does not receive consumer surplus B) $4.00; receives consumer surplus C) $6.00; receives consumer surplus D) $6.00; receives a marginal cost