The Big Mac Index uses the price of a Big Mac in local currencies around the world as a way of testing the purchasing power parity theory. Which of the following is a partial explanation for why the PPP theory does not apply to the Big Mac Index?

a. Wages do not differ across countries
b. Trade barriers, such as tariffs and quotas on beef, may distort local prices
c. Taxes do not distort local prices
d. Rent does not vary substantially across countries
e. The Big Mac is traded internationally


B

Economics

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a. True b. False Indicate whether the statement is true or false

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Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?

A) Demand is likely to be perfectly inelastic. B) Demand is likely to be perfectly elastic. C) Demand is likely to be relatively elastic. D) Demand is likely to be relatively inelastic.

Economics

In an effort to serve consumers who have become more health conscious, a number of firms have begun developing small electronic devices which allow people to monitor various health conditions

These firms are reacting to which of the three key economic ideas? A) Optimal decisions are made at the margin. B) Firms attempt to maximize revenues. C) People respond to economic incentives. D) People are rational.

Economics