If the Marginal Productivity of Labor Was the Sole Determinant

question 106

Multiple Choice

If the marginal productivity of labor was the sole determinant of household income in the U.S., then

• A)no households would be poor according to the official government definition of poverty
• B)no households would be poor according to a relative definition of poverty
• C)the distribution of income would be unequal
• D)every household would have sufficient income to meet biological needs
• E)there would be no need for government programs to redistribute income

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Definitions:

Profit

The financial gain achieved when the amount earned from goods or services exceeds the amount spent on their production or provision.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in financial analysis to assess investment opportunities.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Capacity Alternatives

Different strategies or options available to an organization to adjust or increase its production or service capacity to meet variations in demand.