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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Which one factor below does not influence how a resource should be allocated over time to maximize economic efficiency?
a. Guaranteeing sufficient supplies for future users b. The discount rate c. The future marginal net benefit curve d. The current marginal net benefit curve e. The supply of the resource
An appeal to consumers to purchase union-made products represents an attempt to
a. increase the supply of union labor b. increase the demand for union labor c. decrease the supply of union labor d. decrease the quantity demanded of union labor e. decrease the demand for union labor