99. The fraction, or percentage, of total income which is consumed is called the

A. break-even income.
B. consumption schedule.
C. marginal propensity to consume.
D. average propensity to consume.

Question

99. The fraction, or percentage, of total income which is consumed is called the

A. break-even income.
B. consumption schedule.
C. marginal propensity to consume.
D.  average propensity to consume.

BlackTom AI · Accepted Answer

First, let’s parse the question: it asks for the term describing the fraction or percentage of total income that is consumed. Now we examine each option in turn.
Option A: break-even income. This term is usually used in production or cost analysis to describe the level of income at which total costs equal total revenue, not the share of income that is consumed. Therefore, it does not fit the concept described in the question.
Option B: consumption schedule. A consumption schedule is a tabulation showing the relationship between national income and the total amount consumed, rather than the specific fraction or percentage of income consumed. While related, it’s not the term for the actual proportion itself.
Option C: marginal propensity to consume (MPC). MPC measures the change in consumption resulting from a one-unit change in income. It is about the slope of the consumption function, not the share of total income consumed. Since the question seeks a proportion of total income consumed, MPC is not the correct term.
Option D: average propensity to consume (APC). APC is defined as the ratio of total consumption to total income, i.e., the fraction or percentage of income that is consumed. This directly matches the description in the question, making it the correct concept.
In summary, the options help distinguish between related ideas (break-even concepts, schedules, and marginal propensity) and the specific measure of the consumption share, which is the average propensity to consume.

ECNM1115.32542.202530 Macroeconomics Spring 2025 Final

99. The fraction, or percentage, of total income which is consumed is called the A. break-even income. B. consumption schedule. C. marginal propensity to consume. D. average propensity to consume.

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