Consumption function is given as C = 0.4Y²+0.2Y + 50. a) Find the expression for marginal propensity to consume (MPC) and calculate the value of MPC when income (Y) = 800. What is the change in total consumption (AC) if Y changes by 0.8 units from 800? b) Find the value of Y when marginal propensity to save, MPS = 0.20

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter9: Aggregate Expenditures
Section: Chapter Questions
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Consumption function is given as C = 0.4Y²+ 0.2Y + 50.
a) Find the expression for marginal propensity to consume (MPC) and calculate the
value of MPC when income (Y) = 800. What is the change in total consumption
(AC) if Y changes by 0.8 units from 800?
b) Find the value of Y when marginal propensity to save, MPS = 0.20
Transcribed Image Text:Consumption function is given as C = 0.4Y²+ 0.2Y + 50. a) Find the expression for marginal propensity to consume (MPC) and calculate the value of MPC when income (Y) = 800. What is the change in total consumption (AC) if Y changes by 0.8 units from 800? b) Find the value of Y when marginal propensity to save, MPS = 0.20
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