A Manager in Charge of New Product Development Can Hire

question 24

Multiple Choice

A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $30,000 and that of a market researcher is $20,000. The marginal contribution of engineers and market researchers are

$\begin{array}{cccc}\text { Engineers }(E) &&\text { Market Researchers }(R) \\&\text { Additional }&&\text { Additional }\\\text { Worker } & \text { NewProducts } & \text { Worker } & \text { NewProducts }\\1^{\text {st }} & 50 & 1^{\text {st }} & 30 \\2^{\text {nd }} & 30 & 2^{\text {nd }} & 25 \\3^{\text {rd }} & 15 & 3^{\text {rd }} & 20 \\4^{\text {th }} & 10 & 4^{\text {th }} & 15 \\5^{\text {th }} & 8 & 5^{\text {th }} & 10\end{array}$
-If the manager currently has two engineers and one market researcher, what must be true?

• A) He is making the correct decision because
• B) He is not making the correct decision because
• C) Fewer new products will be developed if he hires fewer engineers and more market researchers.
• D) More new products will be developed if he hires fewer engineers and more market researchers.

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Definitions:

Mean Standard Deviation Graph

A graphical representation that shows the variability of a dataset around its mean value, often used in statistics.

Expected Return

Expected return is the weighted average of the probable returns of an investment, accounting for all possible scenarios.

Risky Asset

An asset that carries a significant chance of losing part or all of its investment value.

Expected Profit

The forecasted amount of profit or loss that is anticipated from a business venture or investment, based on calculations or assumptions.