Figure 10-11 -Refer to Figure 10-11. on the

question 183

Multiple Choice

Figure 10-11
-Refer to Figure 10-11. On the

• A) 390th unit of output, private value exceeds private cost.
• B) 390th unit of output, private value exceeds external value.
• C) 450th unit of output, private value exceeds social value.
• D) 450th unit of output, private cost exceeds social value.

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Definitions:

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another variable, like income.

Disposable Income

The net income available to individuals or households after taxes have been deducted, available for spending, saving, or investing.

Consumption

The act of using goods and services by households, contributing to the overall demand in an economy.

Consumption Function

An economic formula that represents the relationship between total consumption and gross national income.