Regan Grows Flowers and Makes Ceramic Vases

question 81

Multiple Choice

Regan grows flowers and makes ceramic vases.Jayson also grows flowers and makes ceramic vases,but Regan is better at producing both goods.In this case,trade could

• A) benefit both Jayson and Regan.
• B) benefit Jayson, but not Regan.
• C) benefit Regan, but not Jayson.
• D) benefit neither Jayson nor Regan.

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Definitions:

MPS

The marginal propensity to save refers to the portion of each additional dollar of income that is set aside for savings instead of being spent.

Induced Consumption

Consumer spending that increases when income increases and decreases when income decreases.

Autonomous Consumption

Consumer spending that does not change in response to fluctuations in income, reflecting basic, non-discretionary expenditures.

Disposable Income

The funds set aside by households for spending and saving after income tax subtractions.