The marginal productivity theory of income distribution implies that in a perfectly competitive market economy, a worker will receive income
A)equal to the value of her marginal contribution to the production process.
B)that is greater than the value of her marginal contribution to the production process.
C)that is less than the value of her marginal contribution to the production process.
D)greater than, less than, or equal to the value of her marginal contribution to the production process, depending on her ability to negotiate with employers.

Question

Quizplus · Accepted Answer

The marginal productivity theory of income distribution suggests that in a perfectly competitive market economy, a worker's income will be equal to the value of their marginal contribution to the production process. This means that the worker's compensation will be based on how much their work contributes to the production of goods or services, and how much that contribution is worth in terms of market value. The theory assumes that the market is perfectly competitive, which means that employers cannot exercise any undue influence over workers' wages.

The Marginal Productivity Theory of Income Distribution Implies That in a Perfectly