A Major Criticism of the Marginal Productivity Theory of Income

question 4

Multiple Choice

A major criticism of the marginal productivity theory of income distribution is that

• A) the demand for labor resources is price inelastic.
• B) achieving equality in incomes will take time.
• C) imperfectly competitive firms are only interested in profit maximization.
• D) property resources like land are unevenly distributed, which leads to income inequality.

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Definitions:

Capital Gain

The profit from the sale of an asset or investment exceeding its purchase price, which is subject to taxation.

Ownership Interest

Refers to an individual's or entity's legal right to possess, use, and dispose of property or assets.

Adjusted Gross Income

Gross income after deductions and adjustments, important for tax calculations and eligibility for certain credits.

Sales

The total revenue generated from the selling of goods or services over a particular period.