The Slope of the Consumption Function Shows How

question 43

Multiple Choice

The slope of the consumption function shows how:

• A)consumption changes over time.
• B)consumption changes as household size changes.
• C)consumption changes as the price level changes.
• D)income changes as the level of consumption changes.
• E)consumption changes as the level of income changes.

---

Definitions:

Marginal Costs

The expense involved in the production of an additional unit of a product or service.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total number of units produced.

Fixed Cost

refers to a business expense that remains constant regardless of the level of production or sales, such as rent or salaries.

Total Cost

The aggregate of every expense related to the creation of services or goods, taking into account both constant and fluctuating costs.