Question

Compare and Contrast the two normative standards to income distribution discussed in the text: The Productivity and Egalitarian Principle. short answer

Answer 1

Such standards are as below:

No.1) Marginal productivity: Income should be distributed among people based on their marginal productivity or marginal revenue products. This is necessary, because each one doesn’t have same marginal productivity – the higher productivity should be honored and encouraged by paying more.

N.2) Complete income equality: This is the process of removing poverty. If income is distributed among people equally, there should not be any higher or lower or no-income group in the society. Although there are so many measures like imposition of higher tax for higher income groups, the absolutely equality can’t be done and it is also not desired – higher education and skills must be paid more for the weight of their quality.