Figure 8-1

Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
A) 1/2
B) 1/3
C) 2/3
D) 1

Name: Figure 8-1 Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)? A) 1/2 B) 1/3 C) 2/3 D) 1
Brand: Quizplus
Rating: 5.0 (40 reviews)

Question

Figure 8-1

Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
A) 1/2 
B) 1/3 
C) 2/3 
D) 1

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is the slope of the line of best fit through the points on the scatter diagram. By drawing a line of best fit, we can see that for every $1 increase in income, consumption increases by $2. Therefore, the MPC is 2/3.

Figure 8-1 Given the Scatter Diagram in Figure 8-1, What Is the 8-1