What is the marginal productivity theory of income distribution?
What will be an ideal response?
The marginal productivity theory of income distribution concludes that each individual's income is determined by the marginal productivity of the factors of production (such as labor, capital, and natural resources) that the individual owns.
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National League pitchers partake in some batting practice (typically, bunting). Why don't American League pitchers practice batting?
A) Practice can't be expected to improve their terribly poor batting skills. B) They have little incentive, given the designated hitter rule. C) They don't believe the slogan "There is no 'I' in 'Team'." D) They ignore the rules of the game.
According to the circular flow model, which statement is true?
a. Households with income from land and capital are wealthier than households with income only from labor. b. An entrepreneur who earns a wage must have at least two jobs. c. A household that owns no land or capital can earn only wages and/or profit. d. All services are produced by entrepreneurs. e. Some workers are only paid in interest and profit.
Suppose both a monopolist and a perfectly competitive firm charge a price corresponding to the quantity at the intersection of the marginal cost and marginal revenue curves. If this price is between each firm's average variable cost and average total cost curves,
A. the perfectly competitive firm will continue to operate in the short run but the monopolist will shut down. B. both firms will continue to operate in the short run. C. both firms will shut down in the short run. D. the perfectly competitive firm will continue to operate in spite of the loss but the monopolist will earn a profit.
Information asymmetries between producers or consumers along with the problems of externalities can:
A. improve free trade. B. always be solved by alternative dispute resolution (ADR) mechanisms. C. cause market failure. D. restrict the use of property rights in a market economy.