A major criticism of the marginal productivity theory of income distribution is that
A)the demand for labor resources is price inelastic.
B)achieving equality in incomes will take time.
C)imperfectly competitive firms are only interested in profit maximization.
D)property resources like land are unevenly distributed, which leads to income inequality.

Question

Quizplus · Accepted Answer

The marginal productivity theory of income distribution assumes that income is distributed based on the productivity of the resources an individual owns. However, a major criticism is that resources such as land are unevenly distributed, leading to inherent income inequality, as those with more or better resources can generate more income. This criticism points out the structural issues in the distribution of property resources, which the theory does not adequately address.

A Major Criticism of the Marginal Productivity Theory of Income