Author Question: The sum of the marginal propensity to consume and the marginal propensity to save is always equal to ... (Read 136 times)

809779

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The sum of the marginal propensity to consume and the marginal propensity to save is always equal to
 
  A) zero. B) 0.5. C) 1. D) 100.

Question 2

Why are there superstar baseball players but no superstar chiropractors?
 
  What will be an ideal response?


LegendaryAnswers

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Answer to Question 1

C

Answer to Question 2

The increase in the relative incomes of superstars is mainly due to technological advances. For instance, the spread of cable television has greatly increased the number of potential viewers of baseball games. But many of those viewers will watch only if their team is winning. This increases the value to the owners of baseball teams of winning games and, therefore, increases the marginal revenue product of the best baseball players and the salaries they can earn. The difference between the marginal revenue products of the best chiropractors and the marginal revenue products of average chiropractors is much smaller. Even the best chiropractor can only work on one person at a time, but a superstar athlete can perform for millions of fans simultaneously.



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