If Carolyn's Consumption Rises by $5,000 as Her Income Increases

question 6

Multiple Choice

If Carolyn's consumption rises by $5,000 as her income increases from $26,000 to $32,000 per year,her marginal propensity to consume is

• A) 0.16.
• B) 19.
• C) 0.83.
• D) 1.20.
• E) impossible to determine from the data.

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Definitions:

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process.

Cost Of Production Report

A financial report detailing the total cost and production quantities of a manufacturing department or process.

Production

The process of creating goods or services using labor, machinery, and materials to meet consumer demand.

Work In Process

Represents the inventory that has begun the production process but is not yet completed in a manufacturing company.