Marginal productivity theory is directly applicable:
A)only in labour markets
B)to labour and natural resources because both can be measured in standardized units
C)to entrepreneurship because it is an intangible resource
D)to all economic resources as it is always possible to calculate the marginal revenue product
E)only in natural resource markets

Question

Quizplus · Accepted Answer

Marginal productivity theory is applicable to both labour and natural resources as both can be measured in standardized units. It is based on the principle that the value of a resource is determined by its marginal productivity, which is the additional output that is generated by using one more unit of the resource. This theory helps to explain the determination of wages and resource prices in markets.

Marginal Productivity Theory Is Directly Applicable