Economics · Class 11 Commerce
Ch 6Theory of Distribution — Class 11 Economics, concept-first.
Production of any good or service is never the work of a single agent -- land, labour, capital, and the entrepreneur who organises the other three always act together. Once the resulting output is sold in the market, its total value has to be shared out among these four factors.
Key concepts
Hover a concept to preview it and jump to its most relevant Q&A.
Theory of Rent
Ricardo explained rent as a differential surplus: as cultivation is extended to less fertile land, the least fertile (marginal, no-rent) land earns no rent, while more fertile land earns a surplus over the marginal land'…
Most relevant Q&A
- According to Ricardo, what is rent?Free
- What is quasi-rent? How does it differ from Ricardian rent?Preview
- Explain the Ricardian theory of rent and the modern (scarcity) theory of rent, along with the main criticisms of Ricardo's theory.Free
- Write a short note on: Contract rentPreview
- Explain the concept of scarcity of rent.Preview
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning of Distribution: Functional and Personal
Production of any good or service is never the work of a single agent -- land, labour, capital, and the entrepreneur who organises the other three always act together.
Marginal Productivity Theory of Distribution
The marginal productivity theory of distribution is the general neoclassical explanation, associated with economists such as J.B.
Theory of Rent
Rent, in ordinary usage, means any periodic payment for the hire of an asset -- a house, a machine, a shop.
Theories of Wages
Wages are the payment labour receives for its contribution to production. Before looking at how wages are determined, it is worth separating two ways of measuring a wage.
Theories of Interest
Interest is the price paid for the use of capital -- the reward a borrower pays a lender for the use of funds over time, normally quoted as a percentage rate per year.
Theories of Profit
Profit is the income of the entrepreneur -- the person who organises land, labour, and capital, takes decisions, and bears the consequences of those decisions.
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1Explain the concepts of Gross interest and Net interest and their components.Preview
- Q2Write a short note on: Contract rentPreview
- Q3Write a short note on: Real wagesPreview
- Q4Write a short note on: Net profitPreview
- Q5Explain the concept of scarcity of rent.Preview
- Q6Write a short note on: Contract rentPreview
- Q7Write a short note on: Net interestPreview
- Q8Explain the Concept of Scarcity rent with the help of a diagram.Preview
- Q9Write a short note on: Contract rentPreview
- Q10Write a short note on: Quasi-rentPreview
- Q11What are meant by Gross profit and Net profit? Explain the components of Gross profit and Net profit.Preview
- Q12Write a short note on: Quasi-rentPreview
- Q13Write a short note on: Real WagesPreview
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- Q8Explain the marginal productivity theory of distribution.Free
- Q9Explain the Ricardian theory of rent and the modern (scarcity) theory of rent, along with the main criticisms of Ricardo's theory.Free
- Q10Explain the subsistence theory, the wage-fund theory, and the bargaining theory of wages.Preview
- Q11Explain the classical (real) theory, the loanable funds theory, and the Keynesian liquidity preference theory of interest.Preview
- Q12Explain the risk-bearing, uncertainty-bearing, dynamic surplus, and innovation theories of profit.Preview