The Change in Desired Consumption Divided by the Change in Disposable

question 11

Multiple Choice

The change in desired consumption divided by the change in disposable income that brought it about is called the

• A)average propensity to consume.
• B)average propensity not to consume.
• C)consumption function.
• D)marginal propensity to consume.
• E)marginal propensity not to spend.

Recognize the importance of sunk costs and how they affect decision-making.

Understand the relevance of fixed and variable costs in product discontinuation decisions.

Apply cost-volume-profit analysis to assess the impact of new products on overall profitability.

Determine the profitability of upgrading versus selling products in their current condition.

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Definitions:

Work Ethic

A set of moral principles a person uses in their job, often characterized by diligence, reliability, and responsibility.

Immoral

Actions or behavior that go against accepted standards of right and wrong.

Intrinsic Motives

Inner drives or motivations to perform an activity for its own sake, because it is interesting or satisfying in itself.

Hierarchy of Needs

A theory proposed by Abraham Maslow that suggests human actions are motivated by an ascending order of needs, starting from basic physiological needs to self-actualization.