Question 5 $60 $40- $20- $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average propensity to consume: O A. is greater than 1 at all levels of disposable income above $100. O B. cannot be determined from the information given. O C. is equal to the average propensity to save. O D. is greater than 1 at all levels of disposable income below $100. Saving (S)

Question 5 $60 $40- $20- $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average propensity to consume: O A. is greater than 1 at all levels of disposable income above $100. O B. cannot be determined from the information given. O C. is equal to the average propensity to save. O D. is greater than 1 at all levels of disposable income below $100. Saving (S)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If consumption is $30,000 when income is $40,000, and consumption increases to $34,000 when income increases to $45,000, the MPC is Select one: O a. None of the options O b. 0.8 O c. 0.2 O d. 0.4
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Figure 7.1 C b. 100 In Figure 7.1, all of the following is true except: An additional dollar of income always induces some additional consumption. O There is some level of consumption that is independent of income. O The marginal inclination to consume is greater than zero. O At zero income there is zero consumption.
The endowment point is the consumption bundle in which OA. households maximize utility. O B. current consumption is equal to future consumption. O C. savings are zero. D. households are indifferent to interest rate changes. O E. permanent income is maximized.
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The amount/limit of income a consumer has to spend on goods and services is known as O a budget constraint. wealth. O purchasing power. effective demand.