-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 average propensity to consume when real disposable income equals $14,000?
A)0.09
B)0.7
C)0.91
D)1.1

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 average propensity to consume when real disposable income equals $14,000?
A)0.09 
B)0.7 
C)0.91 
D)1.1

Quizplus · Accepted Answer

The average propensity to consume (APC) is calculated by dividing real consumption by real disposable income. If real disposable income is $14,000 and the corresponding real consumption is $12,740, then APC = $12,740 / $14,000 = 0.91.

-Refer to the Above Table