If a household’s income falls from R12 000 to R10 000, and its consumption falls from R9 500 to R8 000, then: choose the correct answer (a) The marginal propensity to consume is ‐0.8. (b) The marginal propensity to consume is 0.75. (c) The marginal propensity to consume is 0.2. (d) The marginal propensity to save is 0.15
Q: Consider the following two-period consumption-saving model: Max C (BC2)4, C1,C2 subject to the…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Problem : Given the saving function S (i) Find the level of consumption (ii) If investment decreases…
A: Saving function S= -10 + 0.2Y Autonomous investment = 50 crore
Q: Q.1.9 If a household’s income falls from R12 000 to R10 000, and its consumption falls from R9 500…
A: MPC = change in consumption/change in income MPC = ∆C/∆Y Change in income = R(12,000-10,000) =…
Q: Intertemporal budget constraint. Budget line 1: Y1 = $900. Y2 = $600. The interest rate is 12…
A: Utility refers to the amount of satisfaction consumers' get from the consumption of goods and…
Q: Find consumption if income is $660 and APC is 0.67
A: The data presented in the question above is:- Income = $660 Average propensity to consume = 0.67…
Q: Which option is the best answer? An example of a consumption function is C - 50+ 0.85Y. When Y is…
A: "A consumption function indicates a relationship between consumption and disposable income. The…
Q: The value of MPS is 0.87 Find the value of MPC
A: Given, MPS= 0.87
Q: The table gives disposable income (DI), consumption (C), and savings (S) data for the country of…
A: Disposable income is the income available with the household sector for the consumption purpose. The…
Q: Disposable Consumption income expenditure (€, thousands) (€, thousands) 200 220 300 300 400 380 500…
A: Disposable income refers to the income of households that is used to consume goods and services, and…
Q: Rosalind won $1000 cash in a lucky draw. Find her marginal propensity to consume if she spent $600…
A: Marginal propensity to consume(MPC) calculates the proportion of extra income which is spent on…
Q: Explain sustainablity with an examples.
A: Sustainability means people using resources in more conscious manner.
Q: What is constrains optimization, explain and discuss the significance of langrage multiplier.
A: Restricted optimization (called constraint optimization in some contexts) is the method of…
Q: 6. Given the savings function S = (3Y2 +2Y)/ ( Y-1) a) Write the consumption function. b)…
A: Answer: Given, Saving function: S=3Y2+2YY-1 (a). Income (Y) = Saving (S) + Consumption (C) Hence, C…
Q: Price of advertising in newspapers and magazines are Rs.5 and Rs.10 respectively. The total budget…
A: General budget constraint can be Witten as follows. Substitute the respective values in Equation…
Q: choose the correct answer: If Jack received a $1,000 bonus and his marginal propensity to save is…
A: Hi Student, Thanks for posting the question. As per the guideline, we are providing answer for the…
Q: bIn an output maximization problem, the output f(x1, x2) = xx will be maximized subject to the…
A: Output maximization problem subject to budget constraint: Objective is to maximize f(x1, x2) = x21…
Q: f a household’s income falls from R20 000 to R17 000 and its consumption falls from R18 000 to R15…
A: The marginal propensity to consume is a metric that quantifies induced consumption, the concept that…
Q: Average propensity Average propensity income ($) Consumption ($) Savings ($) to consume (APC) to…
A: All Blanks answers given below,
Q: If disposable income rose from $40,000 per year to $42,000 and desired consumption expenditures rose…
A: Marginal propensity to consume is defined as the responsiveness of the consumption in an economy to…
Q: If your income increases from $40,000 to $48,000 and your consumption increases from $35,000 to…
A: Answer to the question is as follows :
Q: Q 1 is it always true that when the average income in the area increases the rental prices skyrocket
A: The demand for houses or flats rises with respect to change in income of the people living in that…
Q: Disposable Income (Y) $0 $100 $200 $300 $400 Consumption Spending (C) $100 $180 $260 $340 $420 $500…
A: The marginal propensity to consume is the change in consumption in response to change in the income…
Q: Calculate the value of average propensity to save when savings is given to be as $400 and income is…
A: The average propensity to save is given as the savings per unit of income. APS = S / Y
Q: Minimizing costs implies that which of the following conditions are true? (check all that apply)…
A: Answer: Correct options: (1). MPL/w = MPK/r (2) MRTS = w/r Explanation: Cost minimizing condition: a…
Q: 3.1 Yell-O Yew-Boats, Ltd. produces a popular brand of pointy birds called Blue Meanies. Consider…
A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…
Q: When Ani’s income changes from $400 to $1000, her saving changes from $100 to $580. Ani’s Marginal…
A: The Keynesian consumption function shows the relationship between consumption expenditure and…
Q: If the personal disposable income is 400 and the consumption expenditure is 320 find out the average…
A: As per the question, Generally the personal disposal income is = 400 CONSUMPTION EXPENDITURE = 320…
Q: If income is $1000 and consumption expenditure is $1200 then find the average propensity to save.
A: Given data: Income Y=$1000 Consumption C=$1200
Q: Saving is setting aside money you don't spend now for emergencies or for a future purchase. In an…
A: Savings function is a mathematical representation of the relationship between the disposable income…
Q: Suppose that the level of GDP Increased by $100 bilion in a private closed economy where the…
A: Given information, Change in real GDP: $100 billion marginal propensity to consume: 0.80 To find:…
Q: Monica's current income went up from $100,000 to $105,000 and she increased her current consumption…
A: MONICA INCOME INCREASED FROM 1,00,000 TO 1,05,000 HER CHANGE IN INCOME = $5000; SHE INCREASED HER…
Q: If a household’s income falls from R12 000 to R10 000, and its consumption falls from R9 500 to R8…
A: Marginal propensity to consume is the proportion of the disposable income that a person wants to…
Q: Question attached
A: Lagrangian multiplier method is used in order to solve constrained optimization problems. This is…
Q: e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (2) to…
A: Total cost equation - L + K = 1200 ℒ= (120L0.7 K0.3)+λ (1200-L-K)∂ℒ∂L= 84L-0.3K0.3-λ=0…
Q: 1. and 2. 2. Derive the household’s intertemporal budget constraint in terms of C,, C2, Y1, Y2, and…
A: (Note: Since there are multiple questions, 1, 2 & 3 have been solved. Please resubmit the…
Q: If the personal disposable income is $122 and consumption expenditure is $50 find out the average…
A: Generally in the given question The value of personal disposal income is = $122 The consumption…
Q: An increase in the MPC from 75% to 80% implies all of the following except which of the following?
A: The marginal propensity to consume would result in the ratio of the change in the consumption and…
Q: If average income goes from $30,000 to $33,000 and consumption increases from $29,000 to $31,000,…
A: Marginal propensity to consume (MPC) measures the change in spending on consumption for every…
Q: Consider a model with two periods, each with one composite consumption go are the stable and…
A: In financial matters, a budget constraints addresses every one of the blends of labor and products…
Q: Average Propensities to Consume and to Save Disposable Income Consumption Saving APC…
A: Consumption in an economy gives the amount of money spent on currently made goods and services. It…
Q: Suppose that real domestic output in an economy is 25 units, the quantity of inputs is 20, and the…
A: In economics, production is defined as the process of converting input into output. Input refers to…
Q: Disposable income - 200, 225, 250, 275, 300 Consumption - 205, 225, 245, 265, 285 Refer to the…
A: The difference between the disposable income = 225 - 200 = $25 The difference between the…
Q: Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more…
A: When an individual earns income from making production activities, he pays some amount of income tax…
Q: Consider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 -…
A: Given; C= 400 + 0.5 Yd I = 700 - 4000i + 0.1Y G= 200 T= 200 (M/P)d = 0.75Y - 7500i (MP)= 600
Q: Suppose that firm uses 3 units of labor (L) with 4 proportion. Which of the following is correct?…
A: Marginal Rate of Technical Substitution:- The MRTS can be explained as the proportion at which one…
Q: What happens to the mulitiplier as the MPC falls
A: The relationship between proportionate change in aggregate spending and proportionate change in…
Q: alculate the value of MPS given that:- MPC = 0.31
A: MPC or Marginal Propensity to Consume is the change in the consumption when there is change in…
Q: 2. The utility function of a consumer who consumes quantities x and y has the utility function…
A: Utility function gives the relation between the different quantities of two or more goods through an…
Q: Find the average propensity to consume and consumption is given as $1300 and income is given as…
A:
If a household’s income falls from R12 000 to R10 000, and its consumption falls
from R9 500 to R8 000, then: choose the correct answer
(a) The marginal propensity to consume is ‐0.8.
(b) The marginal propensity to consume is 0.75.
(c) The marginal propensity to consume is 0.2.
(d) The marginal propensity to save is 0.15
Learn your way
Includes step-by-step video
Step by step
Solved in 3 steps with 2 images
- Clare is contemplating her possible consumption patter for this year and next. She know that she will have income of $50,000 this year and $55,000 next yea. Her plan is to consume $40,000 this year (t=0). She is also going to invest 30,000. This investment has a positive NPV of $450. She decides to take the investment; in addition, the return on the investment is 9.62%. What consumption she can expect at t=1? (show a detailed procedure)A decrease in people's disposable income OA. increases investment demand. B. increases consumption. OC. decreases saving. O D. increases saving and decrease consumption. OE. increases saving. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.Given: C = 100 + 0.75Yd (where Yd = Y-T)I = 120-600iG = 200T = 20 + 0.2YMs/P = 300Md/P = 50+0.5Y-600i obtain equilibrium consumption
- no chagpt answer urgent. The marginal rate of substitution of current consumption for future consumption is A) the slope of the indifference curve. B) minus the slope of the difference curve. C) the downward slope of the budget constraint. D) the endowment point. E) the slope of the lifetime budget constraint.There is a negative relationship between planned investment and the interest rate because... Select one: O a. none of the options O b. the interest rate affects the cost of investment projects O c. the risk affects the return on investment projects O d. the interest rate affects the income tax of investment projectsy1=100, y2=20 beta=0.5 and i=100% Calculate optimal saving s=______
- DEFINE Limit of consumption optionsYd Consumption Expenditure $ 0 $ 4,000 $ 10,000 $ 12,000 $ 20,000 $ 20,000 $ 30,000 $ 28,000 $ 40,000 $ 36,000 $ 50,000 $ 44,000 a. Determine break-even level of income b. Determine autonomous consumptionThe demand function for apples is the following. Qn = 10 – Pn + 0.2Y +0.5 Pc – 2Ps + 0.2A Where: Qn = annual sales of apples (millions of kilos) Pn = price of apples (£1 per kilo) Y = disposable income in the UK £trillions (£10 trillions) Pc = price of a pies £ per kilo (£2 per kilo) Ps = price of pear (£2 per kilo) A = advertising measured in hundreds of thousands of £5 (use as 5 in your calculations) What direction should the apple producers move the price if they wanted to maximize their revenue? a. There is not enough information. b. Don't change the price. c. Cut the price. d. Raise the price.
- The demand function for apples is the following. Qn = 10 – Pn + 0.2Y +0.5 Pc – 2Ps + 0.2A Where: Qn = annual sales of apples (millions of kilos) Pn = price of apples (£1 per kilo) Y = disposable income in the UK £trillions (£10 trillions) Pc = price of a pies £ per kilo (£2 per kilo) Ps = price of pear (£2 per kilo) A = advertising measured in hundreds of thousands of £5 (use as 5 in your calculations) Q. How much will the demanded quantity change if the price of apples increases to 1.5? a. It will decrease by 0.4 million kilos. b. It will decrease by 0.5 million kilos. c. It will increase by 2 million kilos. d. It will increase by 0.5 million kilos. e. All the other answers are wrong.1. Use budget constraints to express consumption levels, ct and ct+1. (Hint: Use income conditions given above in the budget constraint. Notice that there are two possible states in the second period.)2. Rewrite the utility maximization problem as choosing the optimal at alone. (Hint: Replace ct and ct+1 in the utility function with your answers from point 1. Use probabilities to derive the expected value in the utility function. Remember that a random variable that takes values x1 in state one with probability p and x2 in state two with probability 1 − p has the expected value E [x] = p.x1 + (1 − p).x2)3. Derive the first order condition and find the optimal value of savings, at. (Hint: The only control (choice) variable is at)4. Does household accumulate precautionary savings to self-insure against the scenario of low income in the second period? Why or why not?If BC2 is the relevant budget constraint, then which of the following bundle(s) is(are) affordable? A. A. B. B. C. C. D. All of the above. E. None of the above.