If the Consumption Function Is Defined as C = 7,250

question 269

Multiple Choice

If the consumption function is defined as C = 7,250 + 0.8Y,what is the marginal propensity to save?

• A)0.2
• B)0.8
• C)5.8
• D)7.25

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Definitions:

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm operates at higher levels of output.

Long Run

A period in economic theory during which all factors of production and costs are variable.

Average Costs

Average costs are calculated by dividing the total costs of production by the quantity of output produced, often used to assess cost efficiency.

Output Increases

A rise in the amount of goods or services produced by an entity.