Given the consumption function C = a + bY (with a>0, 0 < b<1): a. find its marginal function and its average function. b. find the income elsaticity of consumption ECY, and determine its sign, assuming Y > 0. c. Show the income that this consumption function is inelastic at all positive income levels

Given the consumption function C = a + bY (with a>0, 0 < b<1): a. find its marginal function and its average function. b. find the income elsaticity of consumption ECY, and determine its sign, assuming Y > 0. c. Show the income that this consumption function is inelastic at all positive income levels

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.1P

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