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Question : Exploitation of labour is said to exist when:

Option 1: wages = Marginal Revenue Product

Option 2: wages < Marginal Revenue Product

Option 3: wages > Marginal Revenue Product

Option 4:  Marginal Revenue Product = 0


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: wages < Marginal Revenue Product


Solution : The correct answer is wages < Marginal Revenue Product.

When wages are less than the Marginal Revenue Product (MRP), labour exploitation is said to prevail. This is because MRP assesses the additional income generated by a company by hiring one more employee. When wages fall below MRP, the corporation is effectively paying the worker less than the value of their output.

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