Refer to the Given Data for a Hypothetical Economy

question 9

Multiple Choice

$$\begin{array} { | c | r | } \hline \text { Disposable Income } & \text { Saving } \\\hline \$ 0 & - \$ 10 \\\hline 50 & 0 \\\hline 100 & 10 \\\hline 150 & 20 \\\hline 200 & 30 \\\hline\end{array}$$ Refer to the given data for a hypothetical economy. At the $100 level of income, the average propensity to save is

• A) 0.10.
• B) 0.20.
• C) 0.25.
• D) 0.90.

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Definitions:

Consumer Income

The total amount of income earned by consumers in an economy, including wages, salaries, benefits, and other income sources, influencing their buying power.

Demand Curve

A graph that shows the relationship between the price of a good and the quantity demanded by consumers at various prices.

Law of Supply

The economic principle stating that as the price of a good or service increases, the quantity supplied of that good or service will also increase, ceteris paribus.

Decreasing Opportunity Costs

A situation in which sacrificing less of one good to produce another becomes possible, often due to efficiencies or learning.