As Disposable Income Rises

question 26

Multiple Choice

As disposable income rises:

• A) consumption falls, but not by as much as the disposable income rises.
• B) the average propensity to consume increases.
• C) saving falls as a percentage of disposable income.
• D) the average propensity to consume remains unchanged.
• E) saving rises as a percentage of disposable income.

Understand the concept and calculation of slack variables within the context of linear optimization.

Differentiate between various categories of constraints (inequality/equality, binding/nonbinding).

Grasp fundamental steps involved in building linear optimization models.

Understand potential outcomes of a linear optimization model, including unboundedness and infeasibility.

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Definitions:

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