Marginal Productivity Theory Implies That in a Perfectly Competitive Market

question 171

Multiple Choice

Marginal productivity theory implies that in a perfectly competitive market economy, a worker will receive income

• A) equal to the value of her marginal contribution to the production process.
• B) that is greater than the value of her marginal contribution to production process.
• C) that is less than the value of her marginal contribution to the production process.
• D) greater than, less than, or equal to the value of her marginal contribution to the production process, depending on her ability to negotiate with employers.

Understand the impact of state and local government financing methods on public projects.

Grasp the concepts of crowding in and crowding out in the context of government spending and private investment.

Recognize the role of discretionary fiscal policy in budget deficits during various economic conditions.

Understand the effects of U.S interest rates and public debt on the economy and the federal budget.

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