Exhibit 9-3
-In Exhibit 9-3,the MPC is equal to
A)0.25
B)0.33
C)0.67
D)0.75
E)1.33

Name: Exhibit 9-3 -In Exhibit 9-3,the MPC is equal to A)0.25 B)0.33 C)0.67 D)0.75 E)1.33
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Question

Exhibit 9-3 
-In Exhibit 9-3,the MPC is equal to
A)0.25 
B)0.33 
C)0.67 
D)0.75 
E)1.33

Quizplus · Accepted Answer

MPC (marginal propensity to consume) is equal to the change in consumption divided by the change in income. In Exhibit 9-3, when income increases from $400 to $500, consumption increases from $450 to $500. So the change in consumption is $50 and the change in income is $100. Therefore, MPC is equal to 50/100 = 0.5.

Exhibit 9-3 -In Exhibit 9-3,the MPC Is Equal to