If Justin Spends $35,000 When His Income Is $60,000, What

question 24

Multiple Choice

If Justin spends $35,000 when his income is $60,000, what is his average propensity to save?

• A) 0.3
• B) 0.42
• C) 0.58
• D) 0.7

---

Definitions:

Efficiency Wages

Efficiency wages are wages set above the market equilibrium by employers, aiming to boost productivity by increasing worker satisfaction and reducing turnover.

Labor Unions

Organizations formed by workers to protect their rights, improve working conditions, and negotiate wages and benefits with employers.

Minimum Wage

The lowest legal salary that employers can pay to workers, established by government legislation.

Right-to-Work Laws

Legislation that prohibits union security agreements, ensuring that employment is not affected by membership or non-membership in a labor union.