If Disposable Income Is $350 Billion and the Average Propensity

question 18

True/False

If disposable income is $350 billion and the average propensity to consume is .80, then personal saving is $70 billion.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Consumer Surplus

The distinction between the ideal payment consumers are willing to make for a product or service and the real cost they incur.

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers, leading to market balance.

Price Elasticity

The degree to which the demand or supply of a product changes in response to a change in price.