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Use the following data to answer the next question.
The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars.
Disposable Income Consumption
$10,000 $12,000
18,000 18,000
26,000 24,000
34,000 30,000
42,000 36,000
50,000 42,000
The marginal propensity to consume is:__________
a. .60.
b. .75.
c. .80.
d. .20.

Respuesta :

Answer: 0.75

Explanation:

Marginal prospensity to consume refers to the proportion of an increase in income that the consumer will spend on the consumption rather than save.

Marginal propensity to consumer will be:

= Change in consumption / Change in Disposable income

= (42000 - 36000)/(50000 - 42000)

= 0.75

Therefore, the correct option is B.

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