-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the marginal propensity to consume?
A) 0
B) 0.3
C) 0.7
D) 1

Question

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the marginal propensity to consume?
A) 0 
B) 0.3 
C) 0.7 
D) 1

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as the change in consumption divided by the change in disposable income. If the table shows that for every additional dollar of income, consumption increases by 70 cents, then the MPC is 0.7.

-Refer to the Above Table