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Economics miscellaneous

  1. Exploitation of labour is said to exist when
    1. Wage = Marginal Revenue Product
    2. Wage < Marginal Revenue Product
    3. Wage > Marginal Revenue Product
    4. Marginal Revenue Product = 0
Correct Option: B

The term "exploitation" is used to denote the payment to labor of a wage less than its marginal revenue product. Under monopolistic competition, all factors are exploited in this sense. All firms hire labour until the marginal revenue product equals the marginal factor cost.



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