Table 12-3

-Refer to Table 12-3.Given the consumption schedule in the table above,the marginal propensity to consume is
A)0.1.
B)0.3.
C)0.6.
D)0.9.

Question

Table 12-3
 
-Refer to Table 12-3.Given the consumption schedule in the table above,the marginal propensity to consume is
A)0.1. 
B)0.3. 
C)0.6. 
D)0.9.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in income. From the table, as income increases, consumption also increases, and the consistent pattern shows that for every increase in income, consumption increases by a proportion that suggests an MPC of 0.9.

Table 12-3 -Refer to Table 12-3.Given the Consumption Schedule in the Table