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If Your Purchases of Shoes Increase from 9 Pairs Per

question 252

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If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, other things equal, for you, shoes are considered:


Definitions:

Marginal Revenue Product

The additional revenue generated from the sale of one more unit of a good or service produced as the result of one more unit of an input.

Wage Rate

The fixed amount of compensation or payment received by an employee from an employer in exchange for work or services performed.

Labor

Refers to human effort, whether physical or mental, used in the production of goods and services.

Derived Demand

The demand for a good or service that results from the demand for a different, or intermediate, good or service.

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