Table 23-2

-Refer to Table 23-2.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 23-2
 
-Refer to Table 23-2.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 as the change in consumption divided by the change in income. If the table shows that for every increase in income, consumption increases by 90% of that amount, then the MPC is 0.9.

Table 23-2 -Refer to Table 23-2.Given the Consumption Schedule in the Table