One Major Fault with Factor Pricing Analysis Is That Marginal

question 190

True/False

One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields.

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Definitions:

Scarcity

The fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Opportunity Cost

Incurring a cost by overlooking the next most advantageous option when making choices.

Investment

The allocation of resources, usually money, into something with the expectation of generating income or profit in the future.

Capital

Assets used in the production of goods and services, such as machinery, buildings, or tools.