Large Disparities in Wages Are Often Used As

question 8

Multiple Choice

Large disparities in wages are often used as:

• A)evidence of the importance of profit maximization.
• B)a means to question the validity of the marginal productivity theory of income distribution.
• C)evidence of diminishing returns.
• D)evidence to illustrate the absence of market failures in factor markets.

---

Definitions:

Direct Labour-Hours

The total hours worked directly on the production of goods or services.

External Reports

Financial documents that are prepared for parties outside the organization, such as shareholders and creditors.

Overhead Cost

Refers to ongoing expenses that are not directly tied to production but are necessary for running the business, such as rent, utilities, and insurance.

Direct Labour-Hours

A measure of the total time individuals spend working directly on manufacturing a product.