Final answer:
Assessing earning power requires analyzing sources of income, which in the U.S. largely come from labor and owned assets, with income depending on resource quantity and societal value.
Step-by-step explanation:
To assess earning power, one must understand that in a market economy like the United States, income is derived from the ownership of the means of production, which includes resources or assets. One's income is dependent on two key variables: the quantity of each resource owned, and the perceived value of those resources by society. For many, the most critical resource owned is their labor, translating into labor income such as wages, salaries, commissions, tips, and other forms. People who own assets, such as real estate or financial investments like stocks and bonds, gain income through rent, interest, and dividends respectively. Breaking down one's income to assess earning power involves examining the sources of income and the potential to maintain or increase income over time. Understanding these dynamics can inform better financial decisions and future earning potential.