Zach Greinke's Marginal Product as a Baseball Player Would Be

question 103

Multiple Choice

Zach Greinke's marginal product as a baseball player would be about the same as a Los Angeles Dodger and a Kansas City Royal. Why were the Dodgers willing to pay Greinke a higher salary than he was paid as a Royal?

• A) The Dodgers play needed a superstar to attract fans to their games. The Royals had no need to attract fans to their games.
• B) The Dodgers play more home games than the Royals. As a result, the Dodgers earn more revenue from ticket sales that they can use to pay player salaries.
• C) Greinke's marginal revenue product is higher as a Dodger than it was as a Royal.
• D) The owner of the Dodgers was under more pressure from the fans and the Los Angeles media to pay Greinke a higher salary than the Royals were willing to pay.

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Definitions:

Specific Identification Method

An inventory valuation method that tracks the cost of specific items purchased and sold.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs, from its total revenues.

Management Manipulation

Techniques employed by executives to artificially enhance or depress financial statements for personal or corporate advantage.

Inventory Costing Method

a system used to value inventory, including approaches like FIFO, LIFO, and weighted average cost.