Those who advocate the marginal productivity theory of income distribution argue that
A)government policy should be used to redistribute income based on need.
B)family income should be based on a family's demand for products.
C)resource markets will set incomes based on workers' contributions to the output of scarce goods and services.
D)monopoly and monopsony power do not affect resource payments of the overall distribution of income.

Question

Quizplus · Accepted Answer

The marginal productivity theory of income distribution suggests that incomes are determined by the productivity of the resources individuals contribute to the production of goods and services. This theory posits that in competitive markets, the income a worker earns is reflective of their marginal contribution to the production process.

Those Who Advocate the Marginal Productivity Theory of Income Distribution