If disposable income decreases from $1,800 to $1,500 and MPC = 0.75, then saving will

The marginal propensity to consume is defined as the:

a. fraction of total income not spent on consumption. b. proportion of any change in income that is spent on consumption. c. fraction of total income spent on consumption. d. fraction of a change in income that is saved.

A picture-frame company operates in a monopolistically competitive market. Its short- run equilibrium price is $80 and its ATC is $65 . It sells 100 picture frames a week. Ignoring for now its long-run position, in the short run,

a. the firm makes zero economic profit, zero accounting profit, but $1,500 normal profit b. other picture-frame companies will leave the market because it knows new firms will enter to drive price and economic profit down c. the firm makes an $80,000 accounting profit d. the firm makes an economic profit of $1,500 e. the market demand curve will shift to the left as more firms enter the market