$$\begin{array} { | c | c | }
\hline \text { Disposable Income } & \text { Consumption } \
\hline \$ 200 & \$ 205 \
\hline 225 & 225 \
\hline 250 & 245 \
\hline 275 & 265 \
\hline 300 & 285 \
\hline
\end{array}$$ Refer to the given data. If disposable income was $325, we would expect consumption to be
A) $315.
B) $305.
C) $20.
D) $290.

Question

$$\begin{array} { | c | c | } 
\hline \text { Disposable Income } & \text { Consumption } \
\hline \$ 200 & \$ 205 \
\hline 225 & 225 \
\hline 250 & 245 \
\hline 275 & 265 \
\hline 300 & 285 \
\hline
\end{array}$$ Refer to the given data. If disposable income was $325, we would expect consumption to be
A) $315.
B) $305.
C) $20.
D) $290.

Quizplus · Accepted Answer

The consumption function appears to be increasing at a decreasing rate. By observing the pattern, when disposable income increases by $25, consumption increases by $20. Thus, if disposable income is $325, consumption would be $285 + $20 = $305.

Refer to the Given Data