When an economy faces diminishing returns,
A) the slope of the per-worker production function becomes flatter as capital per hour worked increases.
B) the per-worker production function shifts to the left.
C) the per-worker production function shifts to the right.
D) the slope of the per-worker production function becomes steeper as capital per hour worked increases.
A
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A firm can find a competitive advantage
A) by differentiating its product. B) by having a barrier to entry. C) through its organizational structure. D) all of these choices.
Which of the following statements BEST describes a limitation of the Big Mac Index?
A) Profit margins vary by the strength of competition, which affects relative prices. B) The theory of PPP incorrectly assumes that there are barriers to trade. C) The Big Mac represents all possible commodities and services. D) Taxes have no effect on Big Mac prices.