The Primary Economic Explanation as to Why a World-Renowned Architect

question 53

Multiple Choice

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

• A)architects' services are not as highly valued by society as are the services of athletes and actors.
• B)only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive.
• C)government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors.
• D)it is impossible, currently, for an architect to supply his or her services at low cost to every customer.

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Definitions:

Indirect Expenses

Expenses that are not directly tied to the production of goods or services, such as administrative and marketing costs.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing to covering fixed costs and generating profit.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is contributing to fixed costs and profits.

Indirect Expenses

Costs that are not directly traceable to a specific cost object, such as overhead costs for running the business.