If People Purchase Less of a Good When They Have

question 212

True/False

If people purchase less of a good when they have an increase in income, the good in question is an inferior good.

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Definitions:

Wage

The amount of money that is paid to an employee by an employer, typically in exchange for the employee's labor, calculated on an hourly, daily, or piecework basis.

Value of Marginal Product

The additional revenue generated by employing one more unit of a factor of production, holding all other factors constant.

Profit

The financial gain achieved when the revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Wage

Payment to a worker from an employer for labor or services, usually expressed as an hourly, daily, or piece rate.