What is the marginal propensity to consume? Can the marginal propensity to consume be greater than 1?
What will be an ideal response?
The marginal propensity to consume is the change in consumption expenditure divided by the change in disposable income that brought it about. The marginal propensity to consume cannot be greater than 1. Indeed, it is less than 1 because people save part of an increase in disposable income.
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The government played a central role in directing the post-World War II economy, causing all of the following to occur except
(a) The reduction of entitlements, such as Social Security and unemployment benefits. (b) Massive spending by the federal government, justified by the Cold War. (c) Enormously expanded government infrastructure spending on things like highways, airports, education and research and development. (d) There is no "except"; all of the above occurred.
The following input-requirements data are for Country A, a capital-abundant country that produces nothing but bread and wine using only capital and labor as inputs. 1 Pound of Bread1 Gallon of WineCapital Input5 units20 unitsLabor Input4 units10 units In the long run, which of the following can most reasonably be inferred after this country engages in free trade?
A. The wage rates will decline but the returns to capital will increase. B. The returns to capital will rise in the wine industry and will fall in the bread industry. C. The returns to capital will decline but the wage rates will increase. D. The wage rates will increase in the wine industry and will decline in the bread industry.
?Marginal utility is the:
a. ?additional satisfaction obtained from consuming one more unit of a good. b. ?additional cost of purchasing one more unit of a good. c. ?average satisfaction obtained from consuming a good. d. ?overall satisfaction obtained from consuming a good. e. ?increase in satisfaction that results from consuming 1 percent less of a good.
Any society bound by a contract calling for an income distribution that would ________ the well-being of the worst-off member of society would allow for inequality if that inequality had the effect of ________ the lot of the very poor.
A. minimize; improving B. maximize; worsening C. minimize; worsening D. maximize; improving