Answer:
A decrease in the price of unsliced bread, which people consider a substitute for sliced bread.
Answer:
Option (1) is correct.
Explanation:
Given that,
Annual disposable income = $80,000
Marginal propensity to consume, MPC = 0.8
Autonomous consumption spending = $10,000
Therefore,
annual consumer spending:
C = a + bY
Where,
a = Autonomous consumption spending
b = Marginal propensity to consume
Y = Annual disposable income
C = $10,000 + (0.8 × $80,000)
= $10,000 + $64,000
= $74,000
