They would result in inefficient resource allocation if imposed on a competitive market or where market imperfections do not justify a subsidy, by diverting economic resources away from areas where their marginal productivity would be higher.
22.
Several researchers have questioned however to what extent additional hours worked really increase the marginal productivity of labour; particularly in services, the work that gets done in five days could often also be done in four.
23.
Eventually, the wage rates of the agricultural and manufacturing sectors will equalize as workers leave the agriculture sector for the manufacturing sector, increasing marginal productivity and wages in agriculture whilst driving down productivity and wages in manufacturing.
24.
Assuming that the firm is operating with diminishing marginal returns then the addition of an extra worker reduces the average productivity of every other worker ( and every other worker affects the marginal productivity of the additional worker ).
25.
This was explored in a major debate in the 1960s the " Cambridge capital controversy " about the validity of neoclassical economics, with an emphasis on economic growth, capital, aggregate theory, and the marginal productivity theory of distribution.
26.
I tested him by means of a question about the " Wicksell effect ", i . e . the special aspects of the marginal productivity of capital, which at that time was practically unknown in most countries outside of Scandinavia.
27.
The superficiality stems from the fact that those who support this reduction forget that the Cambridge capital controversy called the entire concept of marginal productivity into question by attacking not Clark's special case assumptions but the notion that physical capital can be aggregated.
28.
Over time as this transition continues to take place and investment results in increases in the capital stock, the marginal productivity of workers in the manufacturing will be driven up by capital formation and driven down by additional workers entering the manufacturing sector.
29.
Lazear ( 1979, 1981 ) demonstrates the use of seniority wages to solve the incentive problem, where initially workers are paid less than their marginal productivity, and as they work effectively over time within the firm, earnings increase until they exceed marginal productivity.
30.
Lazear ( 1979, 1981 ) demonstrates the use of seniority wages to solve the incentive problem, where initially workers are paid less than their marginal productivity, and as they work effectively over time within the firm, earnings increase until they exceed marginal productivity.
