Lucy and Lincoln are salespeople working for the same company with equal skills, ability, and experience. Both are paid a small base salary but the majority of their compensation is in the form of a commission, which is a percentage of the sales they make. Lucy earns more each year than Lincoln. What can you conclude about Lucy and Lincoln?

Describe the relationship between the marginal and average products of labor as the employment of labor increases in the short run

What will be an ideal response?

Which of the following is FALSE?

a. Maximizing division profits can sometimes lead to reducing company-wide profits b. Managers of profit centers are usually given a lot of discretion in their decision making c. Profit centers usually require the highest degree of attention by corporate headquarters d. A manager being rewarded on division revenues has the most incentive to make good decisions for his division