Suppose that over a 12-month period,Sonali's income (Y)rises from $27 000 to $35 000 per year and,as a result,her spending on travel (T)increases from $1500 to $2500 per year.Assume there is a linear relation between the two variables,Y and T.What is the marginal response in T to a change in Y?
A)8
B)4
C)0
D)0.25
E)0.125

Question

Quizplus · Accepted Answer

The marginal response in T to a change in Y is calculated by the change in T divided by the change in Y. The change in T is $2500 - $1500 = $1000, and the change in Y is $35,000 - $27,000 = $8,000. Therefore, the marginal response is $1000 / $8000 = 0.125.

Suppose That Over a 12-Month Period,Sonali's Income (Y)rises from $27