Question : 41) The consumption function shows that when disposable income increases : 1238181

 

41) The consumption function shows that when disposable income increases by one dollar, consumption expenditure

A) increases by one dollar.

B) increases by more than a dollar.

C) increases by less than a dollar.

D) does not change.

E) decreases by less than a dollar.

42) The MPC is equal to the

A) change in consumption expenditure divided by the change in disposable income that brought it about.

B) change in consumption expenditure divided by the total disposable income that brought it about.

C) level of consumption expenditure divided by the level of total disposable income that brought it about.

D) level of consumption divided by the change in disposable income that brought it about.

E) change in disposable income divided by the change in consumption expenditure.

43) The marginal propensity to consume equals

A) consumption expenditure divided by disposable income.

B) consumption expenditure divided by the change in disposable income.

C) the change in consumption expenditure divided by the change in disposable income.

D) the change in consumption expenditure divided by disposable income.

E) the change in autonomous consumption divided by the change in induced consumption.

44) The marginal propensity to consume is

A) another name for consumption expenditure.

B) disposable income minus consumption expenditure.

C) the change in disposable income minus the change in consumption expenditure.

D) the change in consumption expenditure divided by the change in disposable income that brought it about.

E) another name for autonomous consumption expenditure.

45) The smaller the amount saved out of a change in disposable income, the

A) smaller the MPC.

B) more horizontal the consumption function.

C) larger the MPC.

D) smaller is autonomous consumption.

E) more net taxes affect consumption.

46) Jane supports herself at college by working in a bookstore earning $300 a month, which she spends entirely every month. If she gets a salary increase of $100 a month, she spends $90 more dollars on consumption expenditure. Jane’s MPC is equal to

A) 1.00.

B) 0.90.

C) $90.

D) 0.10.

E) 0.50.

47) When Joe’s disposable income is $50,000, his consumption expenditure is $45,000, and when his disposable income is $60,000, his consumption expenditure is $53,000. Joe’s marginal propensity to consume is

A) 100.

B) 0.80.

C) 1.25

D) 80.

E) $8,000.

48) When disposable income is $8 trillion, consumption expenditure is $5 trillion; when disposable income is $5 trillion, consumption expenditure is $3 trillion. The MPC is

A) (5/8 + 3/5) = 1.225.

B) (5 + 3) ÷ (8 + 5) = 0.615.

C) (5 – 3) ÷ (8 – 5) = 0.667.

D) (5 + 3) ÷ (8 – 5) = 2.667.

E) (8 – 5) ÷ (5 – 3) = 1.333.

49) If disposable income increases from $5 trillion to $6 trillion and, as a result, consumption expenditure increases from $7 trillion to $7.8 trillion, the MPC is

A) 1.0.

B) 0.8.

C) 5 ÷ 7 = 0.71.

D) 6 ÷ 7.8 = 0.77.

E) 6 ÷ 7 = 0.86.

50) What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

A) 0.66

B) $166

C) 0.34

D) $34

E) More information is needed to determine the MPC.

 

 

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