If Income Is $50,000, Consumption Is $47,500, and Saving Is

question 144

Multiple Choice

If income is $50,000, consumption is $47,500, and saving is $2,500, then the marginal propensity to consume is:

• A) 0.95.
• B) 0.50.
• C) 0.05.
• D) There is not enough information to answer this question.

---

Definitions:

Monopolized

Dominated or controlled entirely by a single entity, often in reference to a market situation where one firm holds the majority market share.

Lerner Index

A measure of a firm's market power and pricing strategy, defined as the difference between price and marginal cost, scaled by price.

Elastic

Describes a situation where the quantity demanded or supplied of a good or service changes significantly in response to price changes.

Inelastic Demand

Describes a situation where the demand for a product does not change significantly in response to a change in the product's price.