If Consumption Expenditures for a Household Increase from $1000 to $1800

question 67

Multiple Choice

If consumption expenditures for a household increase from $1000 to $1800 when disposable income rises from $1000 to $2000,the marginal propensity to consume is

• A) 0.8.
• B) 0.18.
• C) 0.3.
• D) 0.2.

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Definitions:

Elastic Demand

A situation where the quantity demanded of a product is highly sensitive to changes in its price.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in its price.

Golf Courses

Large areas of land designed for the sport of golf, featuring 9 or 18 holes where players aim to hit balls into each hole with the fewest number of strokes.

Movie Theaters

Entities or venues that specialize in the commercial showing of films to the public for entertainment.