-The figure above illustrates an economy's consumption function. What is the marginal propensity to consume in this economy?
A) 0.33
B) 0.67
C) 0.75
D) 1.00

Question

-The figure above illustrates an economy's consumption function. What is the marginal propensity to consume in this economy?
A) 0.33 
B) 0.67 
C) 0.75 
D) 1.00

Quizplus · Accepted Answer

The marginal propensity to consume is the change in consumption divided by the change in income. In this case, the change in consumption is 30 and the change in income is 45, so the marginal propensity to consume is 30/45 = 0.67.

-The Figure Above Illustrates an Economy's Consumption Function