The marginal productivity theory of income distribution holds that ______.
a. the most productive employees increase income by maximizing the substitution effect
b. owners of the means of production receive higher payments than workers or land
owners
c. labor, land, and capital owners are all paid for the value of their contribution to output
d. union workers will receive higher wages than nonunion workers for comparable labor
c. labor, land, and capital owners are all paid for the value of their contribution to output
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If we compare income mobility in relative terms, we would measure whether a person's income:
A. is higher than her parents' income. B. places her higher up in the income distribution than her parents' income. C. is higher at the end of her career compared to the beginning. D. rises with age for all people.
If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is
a. minus 2 percent. b. 2 percent. c. 9 percent. d. 16 percent.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000If Quick Burger has the legal right to operate a drive-through window, then the Sunshine Café would be willing to pay Quick Burger as much as ________ per month to NOT operate a drive-through window.
A. $12,000 B. $11,000 C. $15,000 D. $9,000
In the above figure, when real disposable income equals 600
A. real disposable income exceeds consumption. B. there is dissaving. C. consumption equals real disposable income. D. consumption is less than disposable income.