Criticism of Marginal Productivity Theory

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Criticism of Marginal Productivity Theory The theory, explained above, is true only under certain assumptions which make the theory unrealistic and render it inapplicable to actual conditions. It thus fails to explain the actual rewards earned by the factors of production. We give below the various ground on which the marginal productivity theory is criticised : (i) It assumes that all […]

MARGINAL PRODUCTIVITY THEORY

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MARGINAL PRODUCTIVITY THEORY Now let us see how the services of factors of production are evaluated. One theory put forward ill this connection is the marginal productivity theory. We find references to marginal productivity theory in von Thunen’s  isolierte Staat 1)1826). Long-field’s Lectures on and in Falconry George’s I’mgr(‘ss and (1879). Uut John Bates Clerk’s name is most widely associated with its […]

Meaning of Distribution

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Meaning of Distribution Distribution in the present context. we do not mean the distributive activities middle men. “The economics or distribution,” says Chapman. “accounts ng of the wealth produced by a community among the agents, or the owners which have been active in its production.”! The theory of distribution is concerned with the evaluation of the services of the factors of […]

Role or Factor Prices

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Role or Factor Prices Price theory covers hoth product-pricing a factor ncmg So far we have studied product-pricing and now we turn to Iactor Pricing. The factor prices playa key role in the free- enterprise economy. Briefly i’II It is through factor prices that employment level of the arious period cuvc resources arc determined. That IS. how much 01″a factor […]

Functional VS Personal Distribution

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Functional VS Personal Distribution It may be pointed out that the distribution discussed here is personal. It is distribution Iwt among individuals but among agents of production. The same person may represent in his person all the four agents, e.g. a peasant-proprietor. He is the entrepreneur, the labourer, the capitalist (for he has some capital of his own), and the landlord […]

THE GENERAL THEORY OF FACTOR. PRICING

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THE GENERAL THEORY OF FACTOR. PRICING Significance of Factor Pricing The paid by businessmen to the various factors of production in the form rages, interest, etc., are a major determinant of money incomes. Thus, resource prices playa crucial role in determining the distribution of income households supply the human and property resources and get return. actor prices serve as a rationing […]