If consumption is $750 when real disposable income is $1,000, the average propensity to consume is
A)0.80.
B)0.75.
C)0.50.
D)0.25.

Question

Quizplus · Accepted Answer

The average propensity to consume (APC) is defined as the fraction or percentage of total income that is consumed. It is calculated by dividing consumption by income. 
APC = consumption / income

In this case, consumption is $750 and income is $1000. 
APC = $750 / $1000 = 0.75 or 75%

Therefore, the answer is B) 0.75.

If Consumption Is $750 When Real Disposable Income Is $1,000