The basic neoclassical theory of the labour market predicts that:
A)wages are determined entirely by market supply
B)workers are compensated according to their contribution to the social value of society
C)workers earn a wage equal to the value they contribute to the economy
D)wages are determined entirely by firms that demand labour services

Question

Quizplus · Accepted Answer

The basic neoclassical theory of the labor market, also known as the marginal productivity theory, posits that workers are paid a wage equivalent to the marginal product of their labor, which is the value they add to the production process. This aligns with choice C, where workers earn a wage equal to the value they contribute to the economy.

The Basic Neoclassical Theory of the Labour Market Predicts That