$\begin{array} { c c }
\hline \begin{array} { c }
\text { Disposable income } \
\text { (trillions of 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Consumption expenditure } \
\text { (trillions of 2005 dollars) }
\end{array} \
\hline 0.0 & 1.5 \
2.0 & 3.0 \
4.0 & 4.5 \
6.0 & 6.0 \
8.0 & 7.5 \
\hline
\end{array}$
-
The above table has data from the nation of Media. Based on these data, the marginal propensity to consume is
A)0.67.
B)1.33.
C)1.50.
D)0.25.
E)0.75.

Question

$\begin{array} { c c } 
\hline \begin{array} { c } 
\text { Disposable income } \
\text { (trillions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Consumption expenditure } \
\text { (trillions of 2005 dollars) }
\end{array} \
\hline 0.0 & 1.5 \
2.0 & 3.0 \
4.0 & 4.5 \
6.0 & 6.0 \
8.0 & 7.5 \
\hline
\end{array}$
-
The above table has data from the nation of Media. Based on these data, the marginal propensity to consume is
A)0.67.
B)1.33.
C)1.50.
D)0.25.
E)0.75.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in disposable income. From the table, when disposable income increases from 2.0 to 4.0, consumption increases from 3.0 to 4.5. Thus, MPC = (4.5 - 3.0) / (4.0 - 2.0) = 1.5 / 2.0 = 0.75.

- the Above Table Has Data from the Nation of \text

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the Above Table Has Data from the Nation of
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