If the marginal productivity of labor was the sole determinant of household income in the U.S., then
A)no households would be poor according to the official government definition of poverty
B)no households would be poor according to a relative definition of poverty
C)the distribution of income would be unequal
D)every household would have sufficient income to meet biological needs
E)there would be no need for government programs to redistribute income

Question

Quizplus · Accepted Answer

While marginal productivity of labor is an important factor in determining household income, other factors such as education, experience, and access to resources also play a role. As a result, the distribution of income would still be unequal even if marginal productivity was the sole determinant. Thus, government programs to redistribute income would still be necessary to ensure a more equitable distribution of wealth. The other choices are incorrect because the sole determinant of income implies that all households would have income based solely on their productivity, regardless of poverty definitions or biological needs.

If the Marginal Productivity of Labor Was the Sole Determinant