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# Marginal tax rate

The additional tax which someone pays on each £1 increase of his or her taxable income. In the UK the tax bands for 2003-2004 tax year are:10 per cent on the first slice of earnings22 per cent on next slice40 per cent on top sliceUnder the 'progressive' tax system, once someone's earnings take him into the top tax bracket, any extra earnings will be taxed at the top rate. So someone who is in the 40 per cent bracket has a marginal tax rate of 40 per cent.

# Marginal tax rate

The tax rate that would have to be paid on any additional dollars of taxable income earned.

Marginal tax rate

# Marginal rate of substitution

Marginal rate of substitution

In a production function or a utility function, the ratio at which one argument (input) substitutes for another along an isoquant or indifference curve.

# Marginal value product

Marginal value product

The value of the marginal product of a factor in an industry; that is, the price of the good produced times the marginal product. Determines factor prices when all markets are competitive.

# Marginal efficiency of capital

Marginal efficiency of capital

The percentage yield earned on an additional unit of capital.

# Marginal rate of transformation

Marginal rate of transformation

The increase in output of one good made possible by a one-unit decrease in the output of another, given the technology and factor endowments of a country; thus the absolute value of the slope of the transformation curve.

# Marginal propensity to consume

Marginal propensity to consume

The fraction of a change in income (or perhaps disposable income) spent on consumption. Contrasts with average propensity to consume.

# Further Suggestions

Marginal revenue
Marginal
Marginal cost
Marginal propensity to import
Marginal product
Marginal revenue product
Value marginal product
Marginal utility
Marginal propensity to save
Marginal propensity