I've heard somewhere (possibly from Joel himself, to be fair) that it typically costs a company around half a year's salary to hire an employee (between recruiting costs, etc.) $500/week is a drop in a very large bucket for most employers - at least the kind that are doing active recruiting. They're probably spending way more than that just in personnel time to review resumes - and in fact, being able to filter a bit better by quality will save them that much more in the screener's time.

I can't provide episode number, but I can concur anecdotally that this was discussed on the Stack Overflow podcast. It was probably at or around the debut of the jobs subdomain.

I think this is one strategy. Start with a high price for something, then iterate lower to find the sweet spot -- particularly if your product is new or beta, and you deliberately want to limit your initial user base.