A Person Making $35,000 and Spending $30,800 Has an Average

question 107

True/False

A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.

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Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for all adjustments to be made within an economy or firm.

Fixed Input

Inputs used in production that cannot be varied in the short term, such as buildings or machinery.

Plant Size

The physical capacity or dimensions of a manufacturing facility.

Implicit Costs

They represent the opportunity costs of using resources that a company already owns, rather than the out-of-pocket expenses.