The Same Year That Derek Jeter, One-Time Shortstop for the New

question 129

Multiple Choice

The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. Based on marginal productivity theory and assuming these markets are competitive, this salary differential indicates that:

• A) Derek Jeter contributed much more to society than did the president of the United States.
• B) the president of the United States contributed much more to society than did Derek Jeter.
• C) Derek Jeter and the president of the United States made equal contributions to society.
• D) the salary differential between Derek Jeter and the president of the United States indicated that their marginal productivities cannot be compared.

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Definitions:

After-tax Profit

The amount of net income left over after all taxes have been deducted from total revenues.

Inventory Turnover

A measure of how many times a company’s inventory is sold and replaced over a period, indicating efficiency in inventory management.

Cash-to-cash Cycle

The time duration it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Accounts Receivables

Money owed to a company by customers who have purchased goods or services on credit.