If Consumption Is Defined as C = 4,500 + 0

question 231

True/False

If consumption is defined as C = 4,500 + 0.75Y,then the marginal propensity to save is 0.25.

---

Definitions:

Marginal Cost

Marginal Cost is the change in total cost that arises when the quantity produced is incremented by one unit; it is the cost of producing one more unit of a good.

Average Total Cost

The per-unit cost of production that includes all variable and fixed costs, calculated by dividing total costs by the number of units produced.

Production Process

The sequence of operations or activities involved in the conversion of raw materials into finished goods or services.

Prenatal Period

The stage of human development that occurs from conception until birth, encompassing growth and development in the womb.