State the marginal productivity theory, Macroeconomics

Assignment Help:

Q. State the Marginal Productivity Theory. What are its features and assumption?

Marginal Productivity Theory of distribution states that in a capitalist economy the demand for a factor of production will depend upon its Marginal Product. Features- 1. The remuneration for the factor of production is determined by the supply and demand of that factor 2. Demand for the factor of production is derived from the demand for the things it helps to produce 3. Demand by a firm for a factor of production is the Marginal productivity schedule of the factor Assumptions- 1. There is perfect competition for both the commodity and factor markets 2. All factors of production are perfectly mobile 3. The technique of production is assumed to be constant 4. The law is based on the operation of the law of diminishing returns 5. The different units of a factor are assumed to be homogeneous 6. all units of the factors are employed and no factor will offer its services for any remuneration less than market price.


Related Discussions:- State the marginal productivity theory

Survey of household spending, In 2007, based upon the Survey of Household S...

In 2007, based upon the Survey of Household Spending of 2005, Statistics Canada announced the following weights for the major spending categories tracked by the CPI.

Determine the economic functions of money, Determine the Economic functions...

Determine the Economic functions of money There are three functions of economics of money - A medium of exchange. - A unit of account - Store of value.

Subsequent withdrawals increase, What is the amount of five equal annual de...

What is the amount of five equal annual deposits that can provide five annual withdrawals, where a first withdrawal of $1500 is made at the end of year six and subsequent withdrawa

Lorenz curve, what do we mean when we say export are exogenous and import a...

what do we mean when we say export are exogenous and import are endogeneos?

Inherited a piece of commercial real estate, Until recently you worked as a...

Until recently you worked as an accountant, earning $30,000 annually. Then you inherited a piece of commercial real estate bringing in $12,000 in rent annually. You decided to leav

National income, # ???? .. difference between gdp at market price and nnp...

# ???? .. difference between gdp at market price and nnp at factor cost

International trade, developing countries benefit through international tra...

developing countries benefit through international trade from developed countries

Homework, During the 1990s, technological advance reduced the cost of compu...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of

State about the gross domestic product, Gross domestic product Definit...

Gross domestic product Definition Perhaps the most significant concept in macroeconomics is Gross Domestic Product (GDP): Gross Domestic Product (GDP) is defined as the

Increase in demand, Changes in demand-Baby diapers and retirement villagesO...

Changes in demand-Baby diapers and retirement villagesOther things equal, an increase in the number of buyers for a product or service will increase -demand. Baby diapers and retir

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd