Because of diminishing returns, an economy can continue to ...

[clmills979]

Because of diminishing returns, an economy can continue to increase real GDP per hour worked only if
 
  A) the per-worker production function shifts downward.
  B) there is technological change.
  C) there are decreases in human capital.
  D) there continue to be decreases in capital per hour worked.

Question 2

Refer to Figure 14-1. If Lexus lowers its price, will this deter BMW from entering the market?
 
  A) Yes, because BMW will make a smaller profit than Lexus if it chooses to compete.
  B) No, because BMW will be able to break Lexus' first-mover advantage.
  C) No, because BMW will still make a profit of 120 if it competes with Lexus.
  D) Yes, because BMW stands to lose 100 million if it competes with Lexus.

[tashiedavis420]

Answer to Question 1

B

Answer to Question 2

D