The Equation C = 35

question 121

Multiple Choice

The equation C = 35 + .75Y, where C is consumption and Y is disposable income, tells us that:

• A)households will consume three-fourths of whatever level of disposable income they receive.
• B)households will consume $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.
• C)there is an inverse relationship between disposable income and consumption.
• D)households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.

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Definitions:

Conversion

The process of changing or converting one form, unit, or value to another, applicable in various contexts such as manufacturing, finance, and digital media.

Equivalent Unit

A measurement used in cost accounting to represent the amount of work done on partially finished goods, expressed in terms of fully completed units.

Materials

Raw substances or components that are used in the production or manufacturing process to create goods or products.

Cost

Cost refers to the monetary value spent to acquire goods or services, including amounts paid for materials, labor, and other inputs required to produce or deliver the item.