Question : The consumption function is given by C = 500 + 0.75Y. If disposable income is INR 4,000, what is the level of consumption?
Option 1: INR 3,500
Option 2: INR 4,500
Option 3: INR 6,000
Option 4: INR 7,500
Correct Answer: INR 3,500
Solution : The correct answer is A) INR 3,500
To find the level of consumption, we can substitute the given disposable income (Y) of INR 4,000 into the consumption function:
C = 500 + 0.75Y
= 500 + 0.75 * INR 4,000
= 500 + INR 3,000
= INR 3,500
Therefore, the level of consumption when the disposable income is INR 4,000 is INR 3,500
Question : The consumption function is given by C = 800 + 0.6Y. If disposable income is INR 5,000, what is the level of consumption?
Question : The average propensity to consume (APC) is 0.75. If disposable income is INR 6,000, what is the level of consumption?
Question : The consumption function is given by C = 600 + 0.8Y. If disposable income is INR 3,000, what is the level of consumption?
Question : The saving function is given by S = 0.4Y - 300. If disposable income is INR 2,500, what is the level of saving?
Question : The saving function is given by S = 0.2Y - 100. If disposable income is INR 2,000, what is the level of saving?
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile