The marginal productivity theory of distribution has been criticized because
a. it assumes that the existing distribution of ownership factors is fair and just when it may not be.
b. it does not tell us much about real policy matters.
c. a factor's MRP does not in any way correspond to productive effort.
d. All of the above are correct.
d
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Everything else held constant, an increase in autonomous consumer spending will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Which of the following characterizes the classical view of the economy?
a. The economy is inherently unstable. b. Prices and wages are not flexible. c. The economy will "self-adjust" to full employment. d. None of these.
Which of the following is correct?
a. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures. b. Monetarists believe there is an indirect link between changes in a nation's money supply and changes in expenditures. c. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures. d. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures. e. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will:
A. increase output and decrease price. B. reduce both output and price. C. reduce output and increase price. D. increase both output and price.