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Why marginal propensity to save and marginal propensity to consume sum up to one?
Wiki User
∙ 15y ago
There are only two things we can do with our income, we can either save it, or use it to consume some good. The reason MPC + MPS = 1 is because we use a fraction of the next dollar we earn for consumption (MPC) and the rest for saving (MPS). If the sum is less than one, then we are using our income for some purpose other than saving or consuming; the sum cannot be greater than one because we only have a dollar to "use".
Wiki User
∙ 15y ago
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Who has more marginal propensity to consume someone who simply lost interest in a product and instead of spending is now saving that money or someone who lost his or her job?
Product depending, an individual who has simply lost interest holds greater purchase power than one who is currently under economic duress. However, to negate one against the other is poor long term strategic planning. Economies recover, forgive and forget. People don't.
What economic rule states that the additional satisfaction people get from consuming one more unit of a product will lessen with each additional unit they consume?
diminishing marginal utility
In the following Y equals income-C equals consumption S equals saving c equals marginal propensity to consume-assuming no foreign trade or government sector- given investment a multiplier of 5 which i?
c=100+cY THEN WHICH ONE IS correct (a) S=100+0.2Y (B) C=100+0.8Y (C) S=100+0.8Y (D) C= 100+0.2Y i don't know just tell us
Where could one learn about marginal costs?
One is able to learn about marginal costs at several different places online, such as at the following websites: the Wikipedia Marginal Costs webpage, Marginal Cost, and Margins.
What is the distinction between marginal revenue product and marginal revenue?
I'm thinking that marginal revenue product is the marginal revenue on one product, and marginal revenue is the marginal revenue on the whole firm sales... I'm wondering the same thing but the above response is incorrect. both terms imply values on one item as indicated by the "marginal"
Who has more marginal propensity to consume someone who simply lost interest in a product and instead of spending is now saving that money or someone who lost his or her job?
Product depending, an individual who has simply lost interest holds greater purchase power than one who is currently under economic duress. However, to negate one against the other is poor long term strategic planning. Economies recover, forgive and forget. People don't.
What economic rule states that the additional satisfaction people get from consuming one more unit of a product will lessen with each additional unit they consume?
diminishing marginal utility
In the following Y equals income-C equals consumption S equals saving c equals marginal propensity to consume-assuming no foreign trade or government sector- given investment a multiplier of 5 which i?
c=100+cY THEN WHICH ONE IS correct (a) S=100+0.2Y (B) C=100+0.8Y (C) S=100+0.8Y (D) C= 100+0.2Y i don't know just tell us
Where could one learn about marginal costs?
One is able to learn about marginal costs at several different places online, such as at the following websites: the Wikipedia Marginal Costs webpage, Marginal Cost, and Margins.
What is the distinction between marginal revenue product and marginal revenue?
I'm thinking that marginal revenue product is the marginal revenue on one product, and marginal revenue is the marginal revenue on the whole firm sales... I'm wondering the same thing but the above response is incorrect. both terms imply values on one item as indicated by the "marginal"
How do you find marginal average cost?
Marginal cost comes from the costs of producing just one more of something.
The extra cost of producing one additional unit of output is called?
marginal cost
What is a marginal heading?
A marginal heading is one which has margins around it. Margins can be added on left, right, top and bottom.
What is marginal heading?
A marginal heading is one which has margins around it. Margins can be added on left, right, top and bottom.
What is difference between total utility and marginal utility?
Total utility is the total satisfaction obtain by a consumer by consuming all units of commodity. Marginal utility is the additional satisfaction you get for every additional unit you consume... For example, if you buy 3 slices of pizza one at a time. For the first one, you might get 10 utils, because of the law of diminishing returns, you will only get 7 utils for the second one and 3 utils for the third one. Your total utility is 20 utils (10+7+3). But you can find your marginal utility by looking at each slice of pizza individually.
What is marginal output?
The change in total output, when one more input is added/deducted. If Total Product of current period 'n', then the Marginal Product [Marginal Output]= Tn - Tn-1. It is the marginal change in the total output when one unit of input say labour or capital is added.
If government spending increases 5B and your MPC is a 90 how much does GDP increase?
From such an action (increase in government spending by 5 billion and a Marginal Propensity to Consume of 90%), the GDP would increase (in the scope of simplicity) by 4.5 billion. This is because government expenditures is counted in GDP, and in this case 90% of it is consumed by the populace, so 5B * .9 = 45B. But, being that the GDP is Consumption + Gross Investment + Govt. Spending +(-) Imports/exports, one could suggest that the GDP would increase by just 5B because that which is not consumed is saved (and thus invested).
