Scenario 21-1 $\$ 10,000$ , Consingtion Spending Is $\$ 6,500$ - Whan Income Is

question 54

Multiple Choice

Scenario 21-1. Take the following information as given for a small, imaginary economy:
- When income is $\$ 10,000$ , consingtion spending is $\$ 6,500$
- Whan income is $\$ 11,000$ , cansumption spending is $\$ 7,300$
-Refer to Scenario 21-1. The marginal propensity to consume for this economy is

• A)0.650.
• B)0.664.
• C)0.650 or 0.664, depending on whether income is $10,000 or $11,000.
• D)0.800.

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Definitions:

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.

Marginal Rate

The rate at which one variable changes with respect to a minute change in another variable.

Cheese Doodles

A popular snack food made from cornmeal, cheese coating, and often baked or fried.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied by producers.