If the MPC Is

question 182

Multiple Choice

If the MPC is .8 and the disposable income is $200, then

• A)consumption and saving cannot be determined from the information given.
• B)saving will be $20.
• C)personal consumption expenditures will be $80.
• D)saving will be $40.

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Definitions:

Profit-Maximization

A company's goal to achieve the highest possible profit, where marginal revenue equals marginal cost.

Altruistic Motives

Altruistic motives are actions or behaviors driven by the desire to help others without expecting personal gain.

Consumer Good

Goods that are produced for personal consumption by the general public.

Inelastic

Describing demand that is relatively unresponsive to changes in price.