Economics, 3rd Edition

marginal rate of substitution 

the rate at which a consumer 

is willing to trade one good for another

marginal rate of technical substitution 

the rate at which 

one factor input can be substituted for another at a given level 

of output

marginal revenue 

the change in total revenue from an 

additional unit sold

marginal revenue product 

the extra revenue a firm gets 

from hiring an additional unit of a factor of production

marginal tax rate 

the extra taxes paid on an additional unit of 

income

marginal utility 

the addition to total utility as a result of 

consuming one extra unit of a good

market 

a group of buyers and sellers of a particular good or 

service

market economy 

an economy that addresses the three 

key questions of the economic problem through allocating 

resources through the decentralized decisions of many firms and 

households as they interact in markets for goods and services

market failure 

a situation where scarce resources are not 

allocated to their most efficient use