Multiple Choice
Why does the marginal cost curve typically exhibit a U-shape, regardless of the specific product being produced?
55
views
0. Basic Principles of Economics
Marginal Analysis
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The marginal propensity to save is equal to a change in which of the following divided by a change in income?
A
investment
B
saving
C
expenditure
D
consumption
Verified step by step guidance1
Understand the definition of the marginal propensity to save (MPS). It measures the fraction of an additional unit of income that is saved rather than spent.
Recall the formula for MPS: \(\text{MPS} = \frac{\Delta \text{savings}}{\Delta \text{income}}\), where \(\Delta\) denotes a change in the variable.
Recognize that the numerator represents the change in savings, not investment, expenditure, or consumption.
Identify that the denominator is the change in income, which is the total additional income received.
Conclude that the marginal propensity to save is the change in saving divided by the change in income.
Related Videos
Related Practice
Marginal Analysis practice set
Problem sets built by lead tutorsExpert video explanations