Quèstion 27 $60 $40 $20 $50 + 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average propensity to consume: O A. is equal to the average propensity to save. O B. cannot be determined from the information given. OC. is greater than 1 at all levels of disposable income above $100. O D. is greater than 1 at all levels of disposable income below $100. Saving (S)

Quèstion 27 $60 $40 $20 $50 + 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average propensity to consume: O A. is equal to the average propensity to save. O B. cannot be determined from the information given. OC. is greater than 1 at all levels of disposable income above $100. O D. is greater than 1 at all levels of disposable income below $100. Saving (S)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Quèstion 20 $60 A $40 + $20 + $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average propensity to consume: O A. cannot be detemined from the information given. O B. is equal to the average propensity to save. OC, is greater than 1 at all levels of disposable income below $100. O D. is greater than 1 at all levels of disposable income above $100. Saving (S)
Question: How can there be "Autonomous Spending" even when a person has zero income? O a) All of the above are correct. b) People need to consume at least a minimum to stay alive. UO People need a certain level of consumption even if they do not have income. O d) People spend money from their savings, borrowing or from unemployment or pension pay.
If Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to O save is 3/5. O consume is 1/2. O consume is 3/5. O consume is 2/5.
Using the table1 below, calculate the marginal propensity (MPS) to save. Income Consumption (Dollars) (Dollars) 50,000 48,000 66,000 62,000 O a. 0.363 O b. 0.125 OC. 0.675 O d. 1.50
If disposable income rises from $15,000 to $20,000 and the marginal propensity to consume equals 0.85, then saving must increase by: O $500 O $750 $1,000 O $2,000 O $4,250
Explain how does adecrease in the current income y affect the consumer’s consumption-saving decision. In particular,explain: 1) How will current consumption c, future consumption c′, and savings s change; 2) Arethere any substitution effect or income effect. Make sure you draw two figures, one for the borrowersand one for the lenders
One of these four answers best explains the effect of disposable income on consumption. Which one? O Disposable income does not determine consumption. O Disposable income is the most powerful determinant of income and determines how much an individual consumes. O When an individual has more disposable income, he or she is likely to consume less. O Disposable income is an important determinant of expected future income.
If Michelle's income is reduced to zero after she loses her job, her consumption will be and her saving will be O greater than zero; greater than zero O less than zero; greater than zero O greater than zero; less than zero O less than zero; less than zero
QUESTION 10 If the multiplier is 5 what would be the change in consumption if income rises by 50? O a.40 O b. 90 O c. 250 O d. 10
Use the table below to answer the following question. Income (Dollars) 20,000 24,000 O 0.75 What is the marginal propensity to consume? O 0.875 O 0.90 Consumption (Dollars) O 1.33 18,000 21,500
The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positive
When the consumption function lies above the 45-degree line, households * O Spend on consumption an increasing percentage of any increase in income O Spend on consumption a decreasing percentage of any increase in income O Are dissaving O Save all of any increase in income