In this article we will discuss about Euler’s theorem of distribution. According to marginal productivity theory, every input is paid the value of its marginal product. This means that the entire product will always be handed out to those who work on it. In other words, the sum of the marginal products add up exactly to the total output. There [...]
The below mentioned article provides an overview on the Marginal Productivity Theory of Distribution. The marginal productivity theory states that the demand for a factor depends on its marginal revenue productivity (MRP). MRP is the addition made to total revenue by employing one more unit of a variable factor, other factors remaining unchanged. As a general rule, the marginal revenue [...]
The upcoming discussion will guide you about the relationship between income and leisure. Indifference curve can show the relationship between leisure and income. The horizontal axis represents hours of leisure and the vertical axis represents income. The origin indicates that the individual B has no leisure. If B does not work, he has the maximum amount of leisure time available. [...]