The Marginal Propensity to Consume (MPC) Is Defined to Be

question 59

Multiple Choice

The marginal propensity to consume (MPC) is defined to be:

• A) the change in consumption divided by the change in disposable income.
• B) total income divided by total consumption.
• C) total consumption divided by the change in disposable income.
• D) the change in consumption divided by total disposable income.

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Definitions:

Budget Constraint

An economic model representing all the combinations of goods and services that a consumer can afford with a fixed budget.

Budget Line

A graphical representation showing the combination of two goods that can be purchased with a specific budget at set prices.

Jeans

A type of trousers typically made from denim or dungaree cloth, often regarded as a staple in casual fashion.

Indifference Curves

A graph representing different bundles of goods between which a consumer is indifferent, showing the trade-offs a consumer is willing to make between two goods.