At Hamill Manufacturing of Pennsylvania Highly Skilled Senior Machinists Are

Multiple Choice

At Hamill Manufacturing of Pennsylvania highly skilled senior machinists are paid $70,000, excluding benefits, but the average skilled machinist generates approximately $137,000 in value added. This difference is due to the fact that:

A) the marginal productivity theory of income distribution does not apply in this case.
B) the equilibrium wage rate includes other costs, such as employee benefits, that have to be subtracted from the $70,000 salary.
C) the equilibrium wage rate includes other costs, such as employee benefits, that have to be added to the $70,000 salary.
D) the value of the marginal product of the last machinist hired is equal to the average of all machinists employed.