Suppose that Philip is the best contractor in town, and he makes $400,000 a year. Suppose that Julia Roberts is the best and highest paid actress in Hollywood, and she makes $13 million per movie. Both are the best in their respective fields of work. One reason for the significant difference in incomes has to do with the nature of the service each offers. Philip's contracting services
a. can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year.
b. can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies.
c. can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies.
d. can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year.
b
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Advertising costs are ________ costs and the per unit cost of advertising ________ as production increases
A) fixed; increases B) variable; increases C) fixed; decreases D) variable; does not change
If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do?
a. Stay at its current output level. b. Hire additional workers. c. Raise product prices. d. Reduce employment. e. Purchase new technology.