If the Marginal Propensity to Consume Is 0

question 5

Multiple Choice

If the marginal propensity to consume is 0.9 and income increases from $10,000 to $11,000, by how much does consumption increase?

• A) $11,000
• B) $1,000
• C) $900
• D) $100

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Definitions:

Parietal Lobe

A region of the cerebral cortex that plays a key role in processing sensory information from various parts of the body, understanding spatial orientation, and navigation.

Matching Law

When an animal has free access to two different schedules of reinforcement; its response is proportional to the level of reinforcement available on each schedule.

Behavioral Contrast

A phenomenon where the rate of response varies in accordance with a change in the reinforcement provided in an alternate situation.

Matching Law

A principle that states that the proportion of responses directed towards alternatives is equal to the proportion of reinforcements obtained from those alternatives.