How do you calculate marginal productivity?

Marginal Product = (Qn – Qn-1) / (Ln – Ln-1)

Qn is the Total Production at time n.
Qn-1 is the Total Production at time n-1.
Ln is the Units at time n.
Ln-1 is the Units at time n-1.

What four factors contribute to differences in wages?

Let’s take a closer look at four of the most prominent reasons behind variance in wage rates, including human capital, working conditions, discrimination, and government actions.

How wages are determined?

Just as in any market, the price of labor, the wage rate, is determined by the intersection of supply and demand. When the supply of labor increases the equilibrium price falls, and when the demand for labor increases the equilibrium price rises.

What are types of wages?

Types of Wages:

Piece Wages: Piece wages are the wages paid according to the work done by the worker.
Time Wages: If the labourer is paid for his services according to time, it is called as time wages.
Cash Wages: ADVERTISEMENTS:
Wages in Kind:
Contract Wages:

What is the subsistence theory of wages?

The subsistence theory of wages, advanced by David Ricardo and other classical economists, was based on the population theory of Thomas Malthus. It held that the market price of labour would always tend toward the minimum required for subsistence.

What is Theory of Interest?

The time preference theory of interest, also known as the agio theory of interest or the Austrian theory of interest, explains interest rates in terms of people’s preference to spend in the present over the future.

What are the different theories of interest?

There are many different authors and theories which speak about interest rates. The main theories of interest rates are: Theory of Austrian School; Neo-Classical Theory; Theory of liquidity and Theory of loan.

What is classical theory of interest?

Capital Theory of Interest: In the classical theory, interest is defined as reward for the use of capital and the rate of interest is determined by the demand and supply of capital. The supply of capital is a positive and the demand for capital is a negative function of the rate of interest.