Which of the Following Is True If Marginal Product Is

question 80

Multiple Choice

Which of the following is true if marginal product is greater than average product?

• A)average product must be decreasing.
• B)marginal product must be decreasing.
• C)marginal product must be increasing.
• D)marginal product could either be increasing or decreasing.

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Definitions:

Induced Consumption

The portion of consumer spending that rises when disposable income rises and falls when disposable income decreases.

Autonomous Consumption

The minimum level of spending that must occur, even if a household has no income.

Disposable Income

The sum households have for expenditures and savings after taxes on income are deducted.

Dissaving

The process where spending exceeds income, leading to a depletion of savings or accumulation of debt.