The Slope of the Consumption Function Between Two Points on the Graph

question 152

Multiple Choice

The slope of the consumption function between two points on the graph is

• A) the ratio of the change in consumption to the change in disposable income between those two points.
• B) the ratio of the change in disposable income over the change in consumption between those two points.
• C) equivalent to one plus the marginal propensity to save.
• D) equivalent to the average propensity to consume.
• E) equivalent to the average propensity to savE.

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Definitions:

Producer Surplus

The disparity between what sellers are prepared to accept for a product or service and the amount they actually get.

Antitrust Laws

Legislation enacted by the government to prevent monopolies and to foster competition in the marketplace.

Illegal

Activities or actions that are forbidden by law or statute, punishable by fines, imprisonment, or other sanctions.

Price Discount

A reduction from the original or listed price of a product or service, typically offered to stimulate sales or clear inventory.