A Simple Statement of the Consumption Behavior Suggested in Our

question 92

Multiple Choice

A simple statement of the consumption behavior suggested in our model is that

• A)all income earned from wages is spent
• B)total income must be equal to wages plus profits
• C)social values and customs are the primary determinants of consumption spending
• D)spending increases by less than income
• E)people spend more and save more as their disposable income increases

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Definitions:

Value Of Marginal Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital.

Wage Rate

The amount of money paid to an employee per unit of time, such as hourly, daily, or annually.

Wage Rate

The amount of compensation a worker receives per unit of time or per task completed.

Competitive Labor Market

A market scenario where numerous firms compete to hire the same labor, and workers compete for the same jobs, often leading to wage equilibrium.