"Marginal productivity does not determine how much a worker will earn-it determines only how many workers will be hired at a given wage. Therefore, marginal productivity analysis is a theory of demand for labor, not a theory of distribution." What, then, do you think determines wages? Does marginal productivity affect their level? If so, how?

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter12: The Supply Of And Demand For Productive Resources
Section: Chapter Questions
Problem 4CQ
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"Marginal productivity does not determine how much a worker will earn-it determines only how many workers will be hired at a given wage. Therefore, marginal productivity analysis is a theory of demand for labor, not a theory of distribution." What, then, do you think determines wages? Does marginal productivity affect their level? If so, how?
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Marginal productivity refers to an additional productivity in the total production due to change in one unit of labor.

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