If Consumption Is $800 When Income Is $1,000, the Marginal

question 78

True/False

If consumption is $800 when income is $1,000, the marginal propensity to consume (MPC) must be 0.80.

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Definitions:

Direct Material

The raw materials directly used in the manufacturing of a product, which are easily traceable to the finished product.

Direct Labor-Hours

Direct labor-hours are the total time workers spend creating a product or providing a service, directly correlated to the volume of production.

Variable Overhead

Indirect production costs that vary with the level of output, such as utilities or indirect materials used in the production process.

Direct Materials

The raw materials that are directly used in the manufacturing process of a product and are easily traceable to that product.