-In the above table, the marginal propensity to consume when disposable income changes from $7,000 to $8,000 is
A) 0.8.
B) 0.75.
C) 0.6.
D) 0.5.

Question

-In the above table, the marginal propensity to consume when disposable income changes from $7,000 to $8,000 is
A) 0.8. 
B) 0.75. 
C) 0.6. 
D) 0.5.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in disposable income. Without the specific table data, a general explanation is that if consumption increases by $800 when disposable income increases by $1,000 (from $7,000 to $8,000), the MPC would be 0.8 ($800 / $1,000). This calculation assumes a typical scenario where the increase in consumption is a fraction of the increase in disposable income.

-In the Above Table, the Marginal Propensity to Consume When