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WAEC Economics 2000 Question 22

Question 22

Labour Market

Wages are to some extent, determined by the

  1. A.marginal utility of labour
  2. B.average utility of labour
  3. C.marginal productivity of labour
  4. D.total output of labour.
Show the answer and explanation

Answer: C (marginal productivity of labour)

Explanation

The marginal productivity theory says a worker is paid according to the value of the extra output he adds.