he principle that suggests that the distribution of income should be based on the contribution made by individuals to society's total output is known as A. the functional distribution of income. B. the relative poverty standard. C. the productivity standard. D. the egalitarian principle. The productivity standard fails to yield an equal distribution of income because A. individuals have different abilities and skills. B. it is difficult to measure productivity accurately. C. richer countries have higher productivity than poorer countries. D. diminishing marginal productivity holds.

The principle that suggests that the distribution of income should be based on the contribution made by individuals to society's total output is known as:

C. the productivity standard.

The productivity standard fails to yield an equal distribution of income because:

A. individuals have different abilities and skills.

Explanation:

Generally speaking, productivity refers to how many units of output we can produce by using X amount of units of inputs. The higher the output, the more productive we are.

The same principle is used by the productivity standard to allocate resources in a society. This is a basic doctrine of capitalism that believes that more work and more productivity should equal more income. That is why capitalistic countries tend to have unequal income distribution.