$$\begin{array} { c c }
\begin{array} { c }
\text { Disposable income } \
\text { (trillions of 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Consumption expenditure } \
\text { (trillions of 2005 dollars) }
\end{array} \
\hline 0.0 & 1.5 \
2.0 & 3.0 \
4.0 & 4.5 \
6.0 & 6.0 \
8.0 & 7.5 \
\hline
\end{array}$$
-The above table has data from the nation of Media.Based on these data, the marginal propensity to consume is
A) 0.25.
B) 0.67.
C) 0.75.
D) 1.33.
E) 1.50.

Question

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Disposable income } \
\text { (trillions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Consumption expenditure } \
\text { (trillions of 2005 dollars) }
\end{array} \
\hline 0.0 & 1.5 \
2.0 & 3.0 \
4.0 & 4.5 \
6.0 & 6.0 \
8.0 & 7.5 \
\hline
\end{array}$$
-The above table has data from the nation of Media.Based on these data, the marginal propensity to consume is
A) 0.25.
B) 0.67.
C) 0.75.
D) 1.33.
E) 1.50.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is the change in consumption expenditure due to a change in disposable income.

To calculate the MPC, we need to look at the change in consumption expenditure and the change in disposable income in the table.

From the table, we can see that as disposable income increases by 2 trillion dollars (from 4 trillion to 6 trillion), consumption expenditure increases by 1.5 trillion dollars (from 4.5 trillion to 6 trillion).

Therefore, the MPC is 1.5 trillion dollars / 2 trillion dollars = 0.75.

The correct answer is C) 0.75.

-The Above Table Has Data from the Nation of Media