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Suppose Terese gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Terese's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is Mathematically, it must always be true that: Consumption Therefore, it must also be true that: MPC

Suppose Terese gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Terese's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is Mathematically, it must always be true that: Consumption Therefore, it must also be true that: MPC

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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2. Consumption and saving definitions Suppose Terese gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Terese's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC
Transcribed Image Text:2. Consumption and saving definitions Suppose Terese gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Terese's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC
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