Economics · Class 11 Commerce
Ch 7Theories of Distribution — Class 11 Economics, concept-first.
In economics, distribution refers to how the value of the total output (or national income) generated by an economy is divided among the various factors of production — land, labour, capital, and entrepreneurship — that jointly cooperated to produce it.
Key concepts
Hover a concept to preview it and jump to its most relevant Q&A.
Meaning and Marginal Productivity Theory of Distribution
The theory of distribution studies how the value of total output is shared among the factors of production that created it.
Most relevant Q&A
- What is meant by distribution? Distinguish between functional distribution and personal distribution.Free
- Explain the marginal productivity theory of distribution. How is the price of a factor of production determined under this theory?Free
- A firm operating under perfect competition sells its product at ₹10 per unit. The marginal physical product (MPP) schedule of labour is: 1st…Preview
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Types of Distribution
In economics, distribution refers to how the value of the total output (or national income) generated by an economy is divided among the various factors of production — land, labour, capital, and entr…
Marginal Productivity Theory of Distribution
The marginal productivity theory of distribution, associated with neoclassical economists such as J.B.
Theories of Rent
David Ricardo developed the classical theory of rent using the example of agricultural land. Ricardo argued that rent is the payment made for the use of the original and indestructible powers of the s…
Theories of Wages
Nominal (or money) wages are the amount of money a worker receives as payment for labour, expressed in currency terms.
Theories of Interest
Interest is the price paid for the use of capital — the reward a borrower pays a lender for the use of loanable funds over a period of time, usually expressed as a percentage rate per annum.
Theories of Profit
Gross profit is the total surplus an entrepreneur receives from running a business, before any deductions.
Exercises
+−Show 14 questionsHide questions14 questions
- Q1What is meant by distribution? Distinguish between functional distribution and personal distribution.Free
- Q2Explain the marginal productivity theory of distribution. How is the price of a factor of production determined under this theory?Free
- Q4Explain the Ricardian theory of rent. What are its main criticisms?Free
- Q5Explain the modern (scarcity) theory of rent based on the concept of transfer earnings.Preview
- Q6What is quasi-rent? Distinguish it from Ricardian (land) rent.Preview
- Q7Distinguish between nominal wages and real wages. Explain the subsistence theory of wages (Iron Law of Wages).Preview
- Q8Explain the wages-fund theory and the marginal productivity theory of wages.Preview
- Q9Distinguish between gross interest and net interest.Preview
- Q10Explain the classical (real) theory of interest.Preview
- Q11Explain the loanable funds theory of interest.Preview
- Q12Explain the Keynesian liquidity preference theory of interest.Preview
- Q13Distinguish between gross profit and net profit.Preview
- Q14Explain the dynamic theory of profit (J.B. Clark) and the innovation theory of profit (Schumpeter).Preview
- Q15Explain the risk-bearing theory (Hawley) and the uncertainty-bearing theory (Knight) of profit. How did Knight distinguish risk from uncerta…Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.