Which Is Not a Criticism of the Marginal Productivity Theory

question 60

Multiple Choice

Which is not a criticism of the marginal productivity theory of distribution?

• A)It assumes that the existing distribution of ownership factors is fair and just when it may not be.
• B)It does not tell us much about real policy matters.
• C)A factor's MRP does not in any way correspond to productive effort.
• D)It is inconsistent with most empirical observations.

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Definitions:

Goodwill

Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.

NCI

Non-Controlling Interest, which refers to the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Common Shares

Equity securities representing ownership in a company, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted for the investor’s share of the investee’s profit or loss.