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average propensity to consume is the fraction of the total amount of disposable income that households spend on consumption whereas marginal propensity to consume is the amount that consumption increases for every additional dollar of disposable income.

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How could weistinguish between average propensity to consume from marginal propensity to consume?

The average propensity to consume is the fraction of total disposable income that households spend on consumption (as opposed to saving for example) whereas marginal propensity to consume is the additional consumption that results from an additional dollar of disposable income.


What Relation between marginal cost and average cost?

relation ship between average cost and marginal cost


What is the difference between price and average cost?

marginal cost


Relationship between Tota Product Marginal Product and Average Product?

Average Product = (Total Product) / (Labor) Marginal Product(2) = (Total Product)(2) - (Total Product)(1)


What is the relationship between the multiplier national income and marginal propensity to save?

The multiplier effect in national income is influenced by the marginal propensity to save (MPS). When individuals save a portion of their income, the MPS determines how much of each additional dollar of income is saved rather than spent. A higher MPS leads to a smaller multiplier effect, meaning that increases in spending result in a less significant rise in national income, as less money circulates in the economy. Conversely, a lower MPS (and a higher marginal propensity to consume) results in a larger multiplier, amplifying the impact of initial spending on overall economic activity.


Is the value of marginal propensity to consume between 0 and 1?

Yes, the marginal propensity to consume (MPC) typically ranges between 0 and 1. This value represents the fraction of additional income that a household decides to spend on consumption rather than saving. An MPC of 0 indicates that all additional income is saved, while an MPC of 1 means that all additional income is consumed. Values between 0 and 1 reflect varying degrees of consumption and saving behavior among households.


Draw a diagram with marginal product and average productExplain the relationship between marginal product and average product?

Marginal product is any input in the production process is the increase in the quantity of output obtained from on additional unit of the input. Average product is the output produced when one more unit of the variable factor is employed The relationship is state as: If labour's marginal product is exceed its average product that means labour's average product will be rising. Labour's average product will be falling. If labour's marginal product is less than its average product. If labour's marginal product is equal its average product and the average product will reach the minimum value at the point.


Relationship between marginal cost and average total cost?

The cost curves best tells us the relationship between the marginal cost and average total cost. The average fixed cost (AFC) curve will decline as additional units are produced, and continue to decline.


What is multiplier and explain the working of it?

Multilplier is the ratio by which a given increase in investment brings about an increase in the national income. The extent of the increase in income ranges from 1 to infinity depending on the mariginal propensity to consume (MPC) and marginal propensity to save (MPS). Multiplier is symbolised by the aphabet "K" and its value is calculated as under:1 1K = ------------------------- = -----------------------1-MPC MPSIf MPC =1, K = infinity and if MPC = 0, K = 1 and in between there are numerous ratios, depending on the data in a question.Multiplier can also be defined as the reciprocal of marginal propensity to save because K = 1/MPS


What is the relationship between Average variable cost Average fixed cost and marginal cost?

we can subtract the AVC and we will get the MC


Relationship between average propensity to consume and marginal propensity to consume?

APCMPCIt refers to the ratio of absolute consumption absolute income at a particular point of time.It refers to the ratio of change in consumption to change in income; MPC is the rate of change in APC.APC is useful in long periodMPC is useful in short-periodIn the long period APC=MPC.In the short period there is no change in MPC and MPC


What is the relationship between total average and marginal revenue under monopoly with the help of schedule and diagram?

Total average pertains to annual revenue. While marginal revenue is equivalent to quarterly profits. The relationship between the two is only that one is the dividend of the other.