Answer:
The Marginal Propsensity to Consume is four-fifths
Explanation:
To answer the question, an indirect approach must be used.
- First, we are given data on disposable income and Savings, it is, therefore, easy to assume that we are to calculate the Propensity to Save.
- The Formula for calculating the Propensity to Save is: Change in Savings /Change in Income.
- Change in Savings: $300-$200= $100
- Change in Income: $1,700-$1,200=$500
- MPS= $100/$500= One-fifth
- But hold on: One-fifths Marginal propensity to save is not part of the options, so we continue:
- If Marginal Propensity to Save is One-Fifths, then based on a formula the Marginal Propensity to Consume is the balance of the Subtraction of One-Fifths from One:
- The Marginal Propensity to Consume is therefore four-fifths.
Note:
- If the data given was increase in consumption instead of savings then we would have directly calculated Marginal Propensity to Consume= Change in Consumption/Change in Income or
Answer:
a.both demand and supply
Explanation:
equilibrium can only be attained if supply and demand are at balance (favourable)
Answer:
a)
economic order quantity (EOQ) = √(2SD/H)
- S = order cost = 65
- D = annual demand = 14,000
- H = holding cost = 3.75
EOQ = √[2 x 65 x 14,000) / 3.75] = 696.66 ≈ 697 units
b)
if demand increases to 28,000, then:
EOQ = √[2 x 65 x 28,000) / 3.75] = 985.22 ≈ 985 units
