Table 23-3

-Refer to Table 23-3. Given the consumption schedule in the table above, the marginal propensity to consume is
A) 0.1.
B) 0.3.
C) 0.6.
D) 0.9.

Question

Table 23-3
 
-Refer to Table 23-3. Given the consumption schedule in the table above, the marginal propensity to consume is
A) 0.1. 
B) 0.3. 
C) 0.6. 
D) 0.9.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated by the change in consumption divided by the change in income. If the table shows that for every additional dollar of income, consumption increases by 0.9 dollars, then the MPC is 0.9.

Table 23-3 -Refer to Table 23-3. Given the Consumption Schedule in the Consumption