Consider the following table: $\begin{array} { | c | c | }
\hline \text { After-Tax Income } & \text { Consumption } \
\hline \$ 1000 & \$ 900 \
\hline 2000 & 1800 \
\hline 3000 & 2700 \
\hline 4000 & 3600 \
\hline 5000 & 4500 \
\hline
\end{array}$ These data suggest that:
A)consumption varies inversely with after-tax incomes
B)consumption varies directly with after-tax incomes
C)consumption and after-tax income are unrelated
D)a tax increase will increase consumption
E)a tax decrease will decrease consumption

Question

Consider the following table: $\begin{array} { | c | c | } 
\hline \text { After-Tax Income } & \text { Consumption } \
\hline \$ 1000 & \$ 900 \
\hline 2000 & 1800 \
\hline 3000 & 2700 \
\hline 4000 & 3600 \
\hline 5000 & 4500 \
\hline
\end{array}$ These data suggest that:
A)consumption varies inversely with after-tax incomes
B)consumption varies directly with after-tax incomes
C)consumption and after-tax income are unrelated
D)a tax increase will increase consumption
E)a tax decrease will decrease consumption

Quizplus · Accepted Answer

By observing the table, it is clear that as the after-tax income increases, the consumption also increases. This indicates that there is a direct relationship between after-tax income and consumption. Therefore, the correct option is (B) "consumption varies directly with after-tax incomes".

Consider the Following Table These Data Suggest That: A)consumption Varies Inversely with After-Tax Incomes

Consider the Following Table These Data Suggest That:
A)consumption Varies Inversely with After-Tax Incomes