The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus, an unusually talented designer. Because of Janus's talent, this company collects $1,000,000 in revenue a year. a. How much will Janus earn? Instructions: Enter your response as a whole number. $ per year. How much of her annual salary will be economic rent? Instructions: Enter your response as a percentage rounded to the nearest whole number. %. b. Will the advertising company for which Janus works be able to earn an economic profit? multiple choice Yes, because the company earns far more than other companies. No, because Janus is the only employee in the company. No, because the additional revenue she brings in, which is economic rent, becomes part of her salary. Yes, the company has the best designer.
The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus, an unusually talented designer. Because of Janus's talent, this company collects $1,000,000 in revenue a year. a. How much will Janus earn? Instructions: Enter your response as a whole number. $ per year. How much of her annual salary will be economic rent? Instructions: Enter your response as a percentage rounded to the nearest whole number. %. b. Will the advertising company for which Janus works be able to earn an economic profit? multiple choice Yes, because the company earns far more than other companies. No, because Janus is the only employee in the company. No, because the additional revenue she brings in, which is economic rent, becomes part of her salary. Yes, the company has the best designer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus, an unusually talented designer. Because of Janus's talent, this company collects $1,000,000 in revenue a year.
a. How much will Janus earn?
Instructions: Enter your response as a whole number.
$ per year.
How much of her annual salary will be economic rent?
Instructions: Enter your response as a percentage rounded to the nearest whole number.
%.
b. Will the advertising company for which Janus works be able to earn an economic profit?
multiple choice
-
Yes, because the company earns far more than other companies.
-
No, because Janus is the only employee in the company.
-
No, because the additional revenue she brings in, which is economic rent, becomes part of her salary.
-
Yes, the company has the best designer.
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