The Marginal Productivity Theory of Income Distribution States That

Multiple Choice

The marginal productivity theory of income distribution states that

A) as more and more units of labour are added to a fixed quantity of capital, eventually labour's contribution to a firm's income will decrease.
B) income distribution is determined by the marginal productivity of the factors of production that individuals own.
C) factors of production in short supply command higher prices than those available in abundant quantities.
D) capital owners receive the bulk of a nation's income because capital-intensive production generates productivity gains.