The marginal productivity theory of income distribution suggests that
A) government should subsidize the most productive workers through a system of transfer payments.
B) each individual receives income based on his or her contribution to total output.
C) resource owners should receive income based on the idea of "from each according to his ability, to each according to his wants."
D) resource owners should receive income based upon their needs.

Question

Quizplus · Accepted Answer

The marginal productivity theory of income distribution suggests that each individual receives income based on his or her contribution to total output. This means that those who contribute more to the production process receive a higher share of the total income. This theory is based on the idea that people are paid according to their productivity, and it is one of the most widely accepted theories of income distribution. Options A, C, and D are not supported by the marginal productivity theory.

The Marginal Productivity Theory of Income Distribution Suggests That