The neoclassical theory of labour predicts that when competitive labour markets are in equilibrium:

Question

Quizplus · Accepted Answer

The neoclassical theory of labour predicts that in a competitive labour market, the equilibrium wage rate will be equal to the value of the worker's marginal product (VMP). This means that workers will be paid the value of their marginal contribution to the economy, as stated in option A. Option B is incorrect because the wage rate can differ based on factors such as skills, education, and experience. Option C is also incorrect as the distribution of wages can vary depending on factors such as market conditions and government policies, and is not necessarily bell-shaped.

The Neoclassical Theory of Labour Predicts That When Competitive Labour