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Seventeenth-century philosopher John Locke stated that as much as 99

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Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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Seventeenth-century philosopher John Locke stated that as much as 99 percent of the value of any useful product can be attributed to “the effects of labor.” For Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor (the human work needed to produce goods) and that therefore the employer who appropriates any part of the product’s value as profit is practicing theft.

Although human effort is required to produce goods for the consumer market, effort is also invested in making capital goods (tools, machines, etc.), which are used to facilitate the production of consumer goods. In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods. Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like. The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.
According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

(A) Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.

(B) Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.

(C) Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

(D) Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

(E) Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.




2. The author of the passage is primarily concerned with

(A) criticizing Locke’s economic theories

(B) discounting the contribution of labor in a modern economy

(C) questioning the validity of the labor theory of value

(D) arguing for a more equitable distribution of business profits

(E) contending that employers are overcompensated for capital goods



3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?

(A) The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.

(B) The author’s analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.

(C) Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.

(D) The productive contribution of capital goods must be discounted because capital goods require maintenance.

(E) The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor.



Originally posted by WaterFlowsUp on 30 Dec 2014, 02:10.
Last edited by SajjadAhmad on 29 Aug 2019, 04:50, edited 1 time in total.
Updated - Complete topic (335).
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 20 Jun 2015, 09:25
4
Time Taken: 8 min 18 sec.
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?
A. Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.
B. Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.
C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.
one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods.
D. Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.
E. Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.

2. The author of the passage is primarily concerned with
A. criticizing Locke’s economic theories
B. discounting the contribution of labor in a modern economy
C. questioning the validity of the labor theory of value
D. arguing for a more equitable distribution of business profits
E. contending that employers are overcompensated for capital goods

3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?
A. The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.
B. The author’s analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.
C. Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.
D. The productive contribution of capital goods must be discounted because capital goods require maintenance.
E. The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor.
Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor (the human work needed to produce goods)
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 24 Jun 2015, 09:49
2
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

Analysis : In second paragraph Author talks about total output of consumer good and it distribution. According to that

Investment : Capital Goods contribute 1/3 rd and Labor contribute 2/3rd.
Return : labor receive 2/3rd as wages and salaries. Owner of capital receive 1/3 rd and out of this 1/3rd. Owner of capital has to again give back to workers who are shareholders, pension beneficiaries, and the like


A. Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.
Incorrect as per the explanation above. Worker invest 2/3rd and received 2/3rd + something more.

B. Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.
Incorrect as Owners of capital goods invested 1/3rd and received 1/3rd - Share out to workers again.

C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.
Correct - Owners of capital goods invested 1/3rd and received 1/3rd - Share out to workers again.

D. Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.
Incorrect - not supported by passage.

E. Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.
Incorrect - labor theory talks about the contribution, never said anything about the distribution workers should receive



2. The author of the passage is primarily concerned with

Analysis : In first para author introduced labor theory and gave short description. In second para, author criticize the theory because of some loop hole.

A. criticizing Locke’s economic theories
Incorrect - Too vast to be correct. Locke’s economic theories can be many we just talk about one. Also, "Labor value theory" is not Locke’s theory. Locke's given idea and Labor theory is an extension of that idea.

B. discounting the contribution of labor in a modern economy
Incorrect - No such Philosophy is discussed anywhere in passage. author talks about contribution of labor and its value, has not discounted it.

C. questioning the validity of the labor theory of value
Correct - Author actually question the labor theory of value in second para. In first para, he introduced the Theory.

D. arguing for a more equitable distribution of business profits
Incorrect - Too narrow, Author never argued for equitable distribution. Author just presented the distribution pattern, never argued for the same.

E. contending that employers are overcompensated for capital goods
Incorrect - Too narrow. It is discussed in second para, moreover author took opposite stand.



3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?

Author's argument - The labor theory of value systematically disregards the productive contribution of capital goods

Possible weakner - what is author has miscalculated the labor contribution of capital goods. what if entire capital good is labor' contribution. then author conclusion is broken.

Only Option E matches the pre thought answer.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 12 Apr 2017, 02:56
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

D. Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

why not D?
Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like.

Owners of capital goods are not fully compensated for their investment => This is what arguments wants to establish so far.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 02 Jul 2017, 11:05
2
1)Let's take total output as 99. As per the statements given 1/3*99 = 33(Total output of consumer goods is attributable to the use of Capital Goods).
99*2/3 = 66(Wages + Salaries of workers).
Remaining third ---> 1/3*66 = 22(Compensation to the owners of capital goods).
Part of this remaining third ---> 1/3*22 = Random Value(Share Holders + Pension Beneficiaries + etc).
If you go by options one by one you can see option C matches above calculation. Hence C.
2)The author of the passage (whom I refer to as a he) is primarily concerned with
A. criticizing Locke’s economic theories
INCORRECT, for he only talks about his "effects of labor"
B. discounting the contribution of labor in a modern economy
A CONTENDER BUT INCORRECT, as his focus is not discounting the contribution of labor but rather counting the contribution of capital goods in production. This is evidenced by: "Although human effort is required to produce goods for the consumer market, effort is also invested in making capital goods"
C. questioning the validity of the labor theory of value
CORRECT, as he does exactly this in his conclusion:
"The labor theory of value (45) systematically disregards the productive contribution of capital goods a failing for which Locke must bear part of the blame. "
D. arguing for a more equitable distribution of business profits
INCORRECT, since there is no argument in favor of a more equitable distribution of profits, rather there are factual statements regarding how the profits are distributed.
E. contending that employers are overcompensated for capital goods
INCORRECT, nowhere in the passage is "over"compensation implied. only compensation.
Hence C.
3)Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor (the human work needed to produce goods). Hence E.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post Updated on: 10 Jul 2017, 23:17
Imo C ,C,E
The only tough was question 1 but if read carefully the lines mentioned in the passage we would have no difficulty in answering that question.
Although human effort is required to produce goods for the consumer market, effort is also invested in making capital goods (tools, machines, etc.), which are used to facilitate the production of consumer goods. In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital
goods.

1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?
A. Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.

B. Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.

C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods. Correct

D. Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

E. Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.
Thus it is clear that the income eceived by capital goods owners is not greater than the proportion of output attributable to the use of capital goods.
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Originally posted by arvind910619 on 02 Jul 2017, 23:44.
Last edited by arvind910619 on 10 Jul 2017, 23:17, edited 1 time in total.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 10 Jul 2017, 22:14
I am a non native speaker of English.
this passage is easy to read but the questions are hard and contain many close answers

easy passage, close answers.

in this scenario, we need to spend more time on answering questions. if we are hurry, we die.

so, whenever we see an easy passage, dont think we are in the victory already.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 10 Dec 2017, 04:29
Took 5 mins 45 seconds , including 2 mins 40 seconds to read . All correct

1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

. In modern economies about one-third of the total output of consumer goods is attributable to the use of capital goods. Approximately two-thirds of the income derived from this total output is paid out to workers as wages and salaries, the remaining third serving as compensation to the owners of the capital goods.


C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods. -- Correct


2. The author of the passage is primarily concerned with

A. criticizing Locke’s economic theories -- Incorrect -- It only criticizes 1 theory -- Labor theory of value

B. discounting the contribution of labor in a modern economy -- Incorrect

C. questioning the validity of the labor theory of value - Correct - The labor theory of value systematically disregards the productive contribution of capital goods—a failing for which Locke must bear part of the blame.

D. arguing for a more equitable distribution of business profits - Incorrect -- the passage states that the distribution is fair

E. contending that employers are overcompensated for capital goods -- Incorrect


3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?

A. The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.

B. The author’s analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.

C. Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.

D. The productive contribution of capital goods must be discounted because capital goods require maintenance.

E. The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor. -- Correct
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 08 Sep 2018, 12:06
5 mins 20 secs 2 correct

can someone explain me the 2nd question?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 08 Sep 2018, 22:37
Bob2018 wrote:
5 mins 20 secs 2 correct

can someone explain me the 2nd question?


Bob2018

There were multiple explanations given in the above posts for question 2. Please go through them. If you still feel confused, please put down your analysis of the same and that will let us correct your analysis.

Thanks.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 01 Oct 2018, 09:02
According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

(A) Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.

(B) Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.

(C) Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

(D) Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

(E) Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.

I was confused between C & D. I went for D because the passage states "Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like."

Can someone please clarify why we won't go for D.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 25 Oct 2018, 09:23
2
abrakadabra21 wrote:
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

C. Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

D. Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

why not D?
Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like.

Owners of capital goods are not fully compensated for their investment => This is what arguments wants to establish so far.

shubham21 wrote:
According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

(A) Workers receive a share of this income that is significantly smaller than the value of their labor as a contribution to total output.

(B) Owners of capital goods receive a share of this income that is significantly greater than the contribution to total output attributable to the use of capital goods.

(C) Owners of capital goods receive a share of this income that is no greater than the proportion of total output attributable to the use of capital goods.

(D) Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

(E) Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.

I was confused between C & D. I went for D because the passage states "Moreover, part of this remaining third is received by workers who are shareholders, pension beneficiaries, and the like."

Can someone please clarify why we won't go for D.

You're right to recall where the passage states that owners pay part of their share to employee shareholders and pension beneficiaries.

However, choice (D) doesn't match this statement. Instead, choice (D) states:

    Owners of capital goods are not fully compensated for their investment because they pay out most of their share of this income to workers as wages and benefits.

What's that? According to the passage, do owners pay out most of their share in the form of wages and benefits? Nope. This differs greatly from what's written in the passage, mixing up how the income is distributed.

That's why (D) is not supported by the passage, and that's why we eliminate it.

(C) remains a much better choice because if owners lose part of their 1/3 share of income, (C) is still a solid inference. Their share of income can still be no greater than the 1/3 share of output attributed to their capital goods.

So keep up that sharp reading, but don't forget to stay just as sharp when reading each answer choice.

I hope this is helpful!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 03 Nov 2018, 10:07
Arpitkumar wrote:
anairamitch1804 wrote:
1)Let's take total output as 99. As per the statements given 1/3*99 = 33(Total output of consumer goods is attributable to the use of Capital Goods).
99*2/3 = 66(Wages + Salaries of workers).
Remaining third ---> 1/3*66 = 22(Compensation to the owners of capital goods).
Part of this remaining third ---> 1/3*22 = Random Value(Share Holders + Pension Beneficiaries + etc).
If you go by options one by one you can see option C matches above calculation. Hence C.
2)The author of the passage (whom I refer to as a he) is primarily concerned with
A. criticizing Locke’s economic theories
INCORRECT, for he only talks about his "effects of labor"
B. discounting the contribution of labor in a modern economy
A CONTENDER BUT INCORRECT, as his focus is not discounting the contribution of labor but rather counting the contribution of capital goods in production. This is evidenced by: "Although human effort is required to produce goods for the consumer market, effort is also invested in making capital goods"
C. questioning the validity of the labor theory of value
CORRECT, as he does exactly this in his conclusion:
"The labor theory of value (45) systematically disregards the productive contribution of capital goods a failing for which Locke must bear part of the blame. "
D. arguing for a more equitable distribution of business profits
INCORRECT, since there is no argument in favor of a more equitable distribution of profits, rather there are factual statements regarding how the profits are distributed.
E. contending that employers are overcompensated for capital goods
INCORRECT, nowhere in the passage is "over"compensation implied. only compensation.
Hence C.
3)Locke’s intellectual heirs it was only a short step to the “labor theory of value,” whose formulators held that 100 percent of the value of any product is generated by labor (the human work needed to produce goods). Hence E.


So When he says " Locke must bear part of the blame " , isnt he criticizing Locke and his economic theories here ? Wont A be the better answer option ? anyone?

(A) is not the better option because criticizing Locke is not the main reason the author wrote this passage.

Remember that "main purpose" and "primarily concerned with" questions are not asking us to pick a choice that is true. Instead, this question type challenges us to understand why the author wrote the whole thing. We want to know: What's the point of the passage?

In this case, the author spends one paragraph explaining the labor theory of value and one paragraph taking down that theory. The passage is structured so the author can present a quantitative argument that debunks the theory on its own terms. Disapproval of Locke, who is mentioned as a kind of forefather of this theory, is simply a bonus.

I hope this helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 11 Apr 2019, 01:43
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Okay. lets do a debrief. Hope the community would find my debrief useful.

Action-item: Dont waste time on stupid ****.
Data: I spent way too much time trying to understand the first question stem, trying to pigeonhole it to either a main idea type of questions or details type of question.
Result: As a result, my performance suffer, time-wise. I spent almost 12 minutes by the time I finished reading the passage and answering the first question.
Next time: Try to read the question stem, if the question stem could be pigeonholed, good. Move on, business as usual. If the question stem could NOT be pigeonholed (at least by me, at that exact moment), mark it as ? on your noteboard, move on. Go to read the passage.
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 04 Jul 2019, 21:03
Can anyone please explain the meaning of Q3?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 05 Jul 2019, 19:41
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nkhl.goyal wrote:
Can anyone please explain the meaning of Q3?

Quote:
3. Which of the following arguments would a proponent of the labor theory of value, as it is presented in the first paragraph, be most likely to use in response to the statement that “The labor theory of value systematically disregards the productive contribution of capital goods”?

(A) The productive contributions of workers and capital goods cannot be compared because the productive life span of capital goods is longer than that of workers.
(B) The author’s analysis of the distribution of income is misleading because only a small percentage of workers are also shareholders.
(C) Capital goods are valuable only insofar as they contribute directly to the production of consumer goods.
(D) The productive contribution of capital goods must be discounted because capital goods require maintenance.
(E) The productive contribution of capital goods must be attributed to labor because capital goods are themselves products of labor.

According to the labor theory of value, "100 percent of the value of any product is generated by labor (the human work needed to produce goods)."

The author states that the "labor theory of value systematically disregards the productive contribution of capital goods." In other words, according to the author, SOME of the value of a product is generated, not by labor, but by the capital goods (tools, machines, etc.) used to produce that product. So the author would NOT agree that ALL of the value of any product is generated by labor; instead, the author contends that the value is generated by labor AND by capital goods.

How might a proponent of the labor theory of value respond to the author's comments? Remember, such proponents believe that 100 percent of the value is generated by labor. But what about the contribution of capital goods? The proponents would say, "Yes, capital goods generate some of the value... but the capital goods themselves are products of human labor!"

The author suggests that the productive contributions of capital goods should NOT be counted as labor contributions. However, proponents of the labor theory of value would argue that the productive contributions of capital goods SHOULD be counted as labor contributions. Those tools, machines, etc., didn't just fall from the sky: humans produced those capital goods. So according to the proponents, any productive contribution of capital goods should be attributed to the labor that was needed to produce those capital goods.

I hope that helps!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 19 Sep 2019, 05:24
GMATNinja, I hope you can help me with my analysis.

For Qs 1. Why is option E wrong? /

From the passage, I felt that the workers received more than their value. They got 2/3rd of the compensation in proportion to the value added to total output and also the pension/shareholder advances etc.

When I was analyzing the answer later, the reason I came up with to prove answer E wrong was that maybe some workers owned capital as shareholders. Also even if the workers were paid more, was it because companies were following 'labour theory of value'? (which overestimates value of labour) Possibly not

Is this line of reasoning correct?
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Re: Seventeenth-century philosopher John Locke stated that as much as 99  [#permalink]

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New post 19 Oct 2019, 06:34
Bhavyam wrote:
GMATNinja, I hope you can help me with my analysis.

For Qs 1. Why is option E wrong? /

From the passage, I felt that the workers received more than their value. They got 2/3rd of the compensation in proportion to the value added to total output and also the pension/shareholder advances etc.

When I was analyzing the answer later, the reason I came up with to prove answer E wrong was that maybe some workers owned capital as shareholders. Also even if the workers were paid more, was it because companies were following 'labour theory of value'? (which overestimates value of labour) Possibly not

Is this line of reasoning correct?

To refresh, here's what we were asked:

Quote:
1. According to the author of the passage, which of the following is true of the distribution of the income derived from the total output of consumer goods in a modern economy?

And here's the exact wording of Choice (E):

Quote:
(E) Workers receive a share of this income that is greater than the value of their labor because the labor theory of value overestimates their contribution to total output.

For us to keep (E), both parts of the choice must be true:

    I. Workers receive a share of the distribution of the income derived from total output that is greater than the value of their labor in creating that output.

    II. Workers receive this disproportionately greater share of income because the labor theory of value overestimates their contribution to total output.

In paragraph 2, the author tells us that "one-third of the total output of consumer goods is attributable to the use of capital goods." This suggests that the other 2/3 of total output is attributable to labor.

Then the author states that "approximately 2/3 of the income derived from this total output is paid out to workers as wages and salaries," and adds that part of the remaining 1/3 is "received by workers who are shareholders, pension beneficiaries, and the like."

As you've pointed out, this implies that workers do, in fact, receive a share of this income that's greater than the value of their labor. So part I of choice (E) seems to hold up.

Unfortunately, part II of choice (E) is not reflected by the passage at all. We're told flat-out that the reason some workers receive additional share is because they might own shares in their companies or be entitled to pension benefits. They are NOT receiving additional share because the labor theory of value overestimates their contribution.

The author never states or suggests that these forms of additional share are provided because the workers' contributions are overestimated, and never attributes shareholdings, pension benefits, and the like to any kind of belief in the labor theory of value.

I hope this helps clarify why and how to eliminate (E)!
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Re: Seventeenth-century philosopher John Locke stated that as much as 99   [#permalink] 19 Oct 2019, 06:34
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