Use the following to answer questions .
Exhibit: Income and Consumption

-(Exhibit: Income and Consumption) Calculate the marginal propensity to consume based on the information in the table.
A) 0.00
B) 0.20
C) 0.80
D) 1.40

Question

Use the following to answer questions .
Exhibit: Income and Consumption
 
-(Exhibit: Income and Consumption) Calculate the marginal propensity to consume based on the information in the table.
A) 0.00 
B) 0.20 
C) 0.80 
D) 1.40

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 additional dollar of income, consumption increases by 80 cents, then the MPC is 0.80.

Use the Following to Answer Questions