If There Is Always a Three-For-One Tradeoff Between Goods X

question 151

Multiple Choice

If there is always a three-for-one tradeoff between goods X and Y,then the PPF between X and Y is

• A) a downward-sloping curve that is bowed outward.
• B) a downward-sloping curve that is bowed inward.
• C) a downward-sloping straight line.
• D) an upward-sloping straight line.

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Definitions:

Disposable Income

The disposable capital for households' spending and saving endeavors after income taxes.

Consumption

The process of purchasing goods and services to fulfill the needs and wants of individuals.

Average Propensity

The ratio of total consumption to total income, indicating how much income is spent rather than saved.

Save

Setting aside money or other resources for future use or in case of emergencies.