What is the marginal propensity to save

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Reference no: EM132946605

As the price for a product changes, the quantity of the product demanded changes based on the following schedule:

Total quantity demanded            Price per unit

100                                           P 50

150                                            P 45

200                                           P 40

225                                              P 35

Problem 1: Using arc method, the price elasticity of demand for this product when the price decreases from P 50 to P 45 is:

a. 0.20

b. 0.10

c. 10.00

d. 3.80

Problem 2: In economics, personal income minus personal taxes equals

a. Net income

b. Take home pay

c. Income after tax

d. Disposable income

Problem 3: The marginal propensity to consume is calculated by

a. Dividing consumption by disposable income

b. Dividing disposable income by consumption

c. Dividing the change in disposable income by the change in consumption

d. Dividing the change in consumption by the change in disposable income

Problem 4: An individual receives an income of P 3,000 per month and spends P 2,500. An increase in income of P 500 per month occurs, an individual spends P 2,800. What is the marginal propensity to save (MPS)?

a. 20%

b. 60%

c. 40%

d. 80%

Reference no: EM132946605

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