Answered

Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

The president of the United States receives an annual salary of $400,000, while some top baseball players such as Clayton Kershaw and Mike Trout earn more than $34 million annually. Based on marginal productivity theory, what does this say about their contributions to society

Sagot :

anthougo

Answer:

Based on marginal productivity theory, this says that their contributions to society are not equal because society is willing to pay more for Clayton Kershaw and Mike Trout as baseball players than it is willing to pay for the president of the United States.

Explanation:

a) Data and Calculations:

Annual salary of the U.S. president = $400,000

Annual salary of baseball players = $34 million

For each dollar paid to the U.S. president, society is willing to pay a baseball player $85 ($34 million/$400,000)

b) The marginal productivity theory, which considers the contribution made by each factor of production, is based on the following assumptions that:

1) all units of the production factor, for example, labor, are homogeneous.  

2) the baseball player can be substituted for the U.S. president.  

3) there is perfect mobility of factors, from being a baseball player to being a U.S. president, and vice versa.

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.