The Neoclassical Theory of Distribution

question 147

Multiple Choice

The neoclassical theory of distribution:

• A) was developed by Karl Marx.
• B) is rejected by most economists today.
• C) shows that the national income of an economy is not equal to total output.
• D) is a theory of how national income is divided among the factors of production.

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Definitions:

Automobile Supply

The total inventory or production capacity for cars and vehicles available in the market at a given time.

Wage Increase

An upward adjustment in the amount of wages or salary an employee receives for their labor.

Supply Curve

A visual chart that illustrates how the cost of a product is linked to the amount of the product that producers are prepared to manufacture and sell.

Quantity Supplied

The volume of a good or service that manufacturers are prepared and able to put on the market at a particular price point within a certain timeframe.