Question

The president of the United States receives an annual salary of $400,000. Derek Jeter, shortstop for the New York Yankees, receives an annual salary of $23.2 million. If the president of the United States actually contributes more to society than Derek Jeter, we can conclude that:

A. actors other than marginal revenue product probably explain the salary differences.
B. the salary differences are based entirely on marginal revenue products.
C. there is never a relationship between marginal revenue product and pay.
D. the markets for their respective services are perfectly competitive.

Answer 1

The correct answer is A

Step-by-step explanation:

The US president salary is $400,000 whereas the New York shortstop receives the annual salary which amounts to $23.2 million. And the president of the US contributes more to the society than the Deter Jeter.

From this it can be concluded that the factors other the marginal revenue product (which is an additional revenue that is generated from using additional unit of the input), most probably states or explain the differences in the salary of of the both the person.