The marginal productivity theory of income distribution proposes spending on res
ID: 1106618 • Letter: T
Question
The marginal productivity theory of income distribution proposes spending on resources for production should be based on each resource's marginal contribution to output. In other words, more productive resources will be paid more (better workers have higher salaries). Discuss the ethical implications of this. Feel free to use the following questions to guide your responses.
Should non-productive people be paid very little? Or should they be paid more in order for them to achieve a certain quality of life?
Should highly productive people earn the vast majority of society's wealth and income?
Should resources be passed on via inheritance, despite the fact that they may be going to a non-productive person/use?
Explanation / Answer
Marginal productivity theory of income distribution holds an important place in the factor market theory.
It says that factors should be paid according to their marginal contribution to the output.
It has many implications which are discussed as follows
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.