If the Saving Function Is S = - 25

question 113

Multiple Choice

If the saving function is S = - 25 + 0.4YD, then the consumption function is

• A)C = 25 + 0.4YD.
• B)C = - 25 + 0.4YD.
• C)C = 25 - 0.4YD.
• D)C = 25 + 0.6YD.
• E)C = 25 + 0.6Y.

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Definitions:

Average Total

Typically refers to the average total cost, which is the total cost of production divided by the number of goods produced.

Total Variable

Expenses that change in proportion to the activity of a business, such as costs of goods sold, which vary with the level of production or sales volume.

Average Variable Cost

The variable costs of production (costs that change with output level) divided by the quantity of output, indicating the average variable cost per unit.

Producing Purses

Producing purses involves the manufacturing and assembling of various materials to create handbags and similar accessories.