Asked by Saadak Ahmed Mohamud on Jun 09, 2024
Verified
The marginal productivity theory of income distribution holds that all resources are paid according to their marginal contribution to society's output.
Marginal Productivity Theory
An economic theory suggesting that the payment to each factor of production equals the added productivity that one additional unit of the factor brings to the product.
Income Distribution
How the total earnings are distributed among people or families within an economic system.
- Apply the marginal productivity theory of income distribution to understand resource compensation.
Verified Answer
MS
Manpreeth SinghJun 14, 2024
Final Answer :
True
Explanation :
The marginal productivity theory of income distribution posits that the payment to each factor of production (like labor, land, and capital) corresponds to its marginal contribution to the production process, essentially stating that resources are compensated based on their productivity.
Learning Objectives
- Apply the marginal productivity theory of income distribution to understand resource compensation.
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