-The above table has data from the nation of Atlantica. Based on these data, what is the marginal propensity to consume?
A) 1.00
B) 1.50
C) 0.50
D) 1.33
E) 0.75

Question

-The above table has data from the nation of Atlantica. Based on these data, what is the marginal propensity to consume?
A) 1.00 
B) 1.50 
C) 0.50 
D) 1.33 
E) 0.75

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in income. Without specific numbers from the table, a general explanation is that if the consumption increases by a certain amount when income increases by a larger amount, the MPC is the ratio of these changes. An MPC of 0.75 means that for every additional dollar of income, consumption increases by 75 cents.

-The Above Table Has Data from the Nation of Atlantica