Figure 8-1

-Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
A)1/2
B)1/3
C)2/3

Question

Figure 8-1
​ 
-Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
A)1/2 
B)1/3 
C)2/3

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is the slope of the line of best fit that goes through the data points. In this case, the line appears to have a slope of approximately 2/3, indicating that for every additional dollar of disposable income, consumers will spend about 2/3 of it. Therefore, the best estimate for the MPC would be 2/3.

Figure 8-1 ​

Figure 8-1