Differences in talent and ability of workers resulting in differences in their wages is consistent with the marginal productivity theory of income distribution.

Question

Quizplus · Accepted Answer

According to the marginal productivity theory, the wage rate of a worker is proportional to his/her marginal productivity. Since workers with higher levels of talent and ability are likely to have higher marginal productivity, differences in wages between workers can be attributed to differences in their talent and ability. Therefore, the statement is true.

Differences in Talent and Ability of Workers Resulting in Differences