Scenario 34-1

Multiple Choice

Scenario 34-1. Take the following information as given for a small economy:
• When income is $10,000, consumption spending is $6,500.
• When income is $11,000, consumption spending is $7,250.
-Refer to Scenario 34-1. The marginal propensity to consume for this economy is

A) 0.650.
B) 0.750.
C) 0.650 or 0.664, depending on whether income is $10,000 or $11,000.
D) 0.800.