EBK PRINCIPLES OF MACROECONOMICS
12th Edition
ISBN: 9780134079592
Author: Oster
Publisher: YUZU
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Question
Chapter 15, Problem 1.3P
Sub part (a):
To determine
Average propensity to consume.
Sub part (b):
To determine
Changes in consumption as income rises.
Sub part (c):
To determine
Relationship between APC and MPC
Sub part (d):
To determine
Relationship between APC and MPC
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The consumption demand function merely states that as income goes up, households consume all their increased income
Calculate the equilibrium income by using the consumption function formula. 1. Y =C 2. Y= C+I 3. Y = C+I+G 4. Y= C+I+G+Nx Given: C = 100; I = 150; G = 100; m= 50; x=35; change in DY = 900; change in C = 630
Suppose that c= a+by, where c= consumption, a = consumption at zero income, b = the slope of the
consumption from function, and y = income,
a) are c and y positively related or are they negatively related?
b) If graphed, would the curve of this equation slope upward or downward?
c) What is the value of c if a = 10, b = 50 and y = 200?
d) what is the value of y if c = 100, a = 10 and b = 25?
Chapter 15 Solutions
EBK PRINCIPLES OF MACROECONOMICS
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