Suppose a Consumption Function Is Given as C = $150

question 130

Multiple Choice

Suppose a consumption function is given as C = $150 + 0.75Y_D.The marginal propensity to save is

• A)150.
• B)0.75.
• C)0.25.
• D)-0.75.

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Definitions:

Predetermined Overhead Rate

An estimated charge used to allocate manufacturing overhead costs to individual products or job orders based on a predetermined activity base.

Machine-Hours

The total hours that machinery is operational and actively being used in the production process, often used as a basis for allocating manufacturing overhead.

Manufacturing Overhead

A rephrased description: Costs indirectly linked to the production of goods, such as maintenance, factory supplies, and quality control.

Unit Product Cost

The cost to produce a single unit of product, calculated by dividing the total production costs by the number of units produced.