It is known that the data of an economy is as follows: the amount of autonomous consumption expenditure of the community is 500 billion, and every time there is an increase in income (Y) by 1 billion, the amount of public consumption expenditure increases by 0.75 billion.Specify: a. Determine the form of the consumption function (C) and the saving function (S) and determine the economy's breakeven point b. Determine the form of the consumption function (C) and the saving function (S) if the government imposes a functional tax of 10% of income or Ty = 0.10Y

It is known that the data of an economy is as follows: the amount of autonomous consumption expenditure of the community is 500 billion, and every time there is an increase in income (Y) by 1 billion, the amount of public consumption expenditure increases by 0.75 billion.Specify: a. Determine the form of the consumption function (C) and the saving function (S) and determine the economy's breakeven point b. Determine the form of the consumption function (C) and the saving function (S) if the government imposes a functional tax of 10% of income or Ty = 0.10Y

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.4P

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