Which theory in labor economics holds that unless an employee can produce a value equal to the value received in wages,it will not be worthwhile to hire that worker?
A) Theory of value
B) Credibility theory
C) Tournament theory
D) Marginal revenue theory

Question

Quizplus · Accepted Answer

This theory is known as the marginal revenue theory or the theory of marginal productivity. It suggests that an employer will hire a worker if the revenue generated by that worker's output is greater than or equal to the cost of employing them. In other words, the employer will seek to maximize profits by hiring workers whose output generates at least as much revenue as they are paid in wages.

Which Theory in Labor Economics Holds That Unless an Employee