Which of the Following Changes in Disposable Income Would Lead

question 178

Multiple Choice

Which of the following changes in disposable income would lead to the smallest increase in consumption?

• A)a $30 000 increase in disposable income, if MPC equals 0.25
• B)a $15 000 increase in disposable income, if MPC equals 0.6
• C)a $20 000 increase in disposable income, if MPC equals 0.5
• D)a $12 000 increase in disposable income, if MPC equals 0.75

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Definitions:

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for the adjustment to changes in market conditions or demand.

Output

The total amount of goods and services produced by an economic system or by a single firm within a certain period.

Virtual Monopolies

Situations where a single company or entity dominates an entire market or industry, even though technically there may be minor competitors.

Essential Resource

A fundamental input required for the production of goods and services, often characterized by its scarcity and necessity.