An Inferior Good

question 16

Multiple Choice

An inferior good

• A)has a negative income elasticity.
• B)is one where the demand curve shifts to the left when income goes up.
• C)exists only in theory.
• D)is a low-quality good.
• E)Both a and b are true.

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Definitions:

Monopsonistic Labor Market

A market situation in which there is only one buyer (employer) for many sellers (workers), allowing the buyer to exert considerable control over wages and employment conditions.

MRP

Marginal Revenue Product; the additional revenue generated by employing one more unit of a factor, such as labor or capital.

Marginal Revenue Product

The additional revenue a firm earns by employing one more unit of input, like labor or capital, in the production process.

Wage Rate

The amount of compensation a worker receives for performing a service, typically measured per hour or unit of work.