If the marginal productivity of labor was the sole determinant of household income in the United States,then _____
A)no households would be poor according to the official definition of poverty.
B)no households would be poor according to the relative definition of poverty.
C)the distribution of income would be unequal.
D)every household would have sufficient income to meet the basic needs.
E)there would be no need for government programs to redistribute income.

Question

Quizplus · Accepted Answer

Even if the marginal productivity of labor is the sole determinant of household income, the distribution of income will still be unequal. This is because some households will have more productive workers than others, which will result in higher incomes. This means that there will be some households that are poor according to both the official and relative definitions of poverty. Therefore, there will still be a need for government programs to redistribute income.

If the Marginal Productivity of Labor Was the Sole Determinant