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
- A consumer is maximising her utility function: U(r. y) = (r05 +y0.5)2, subject to the budget constraint 4x + 2y = 108. (a) Set up the Lagrangian function of this utility maximisation problem and first-order conditions. (b) What are the utility maximizing amounts of x and y? Also, calculate the multiplier. (c) What are the utility maximising amounts of x and y if the budget constrain to x+ 2y = 36? How would change? Explain your reasoning. (Hint: Yc need to calculate A, rather comment on how it would change and why.)DEFINE Limit of consumption options(c) If the preferences are concave, will the consumer ever consume both of the goods together?
- Suppose a consumer has $1500 in the current time period and $1100 in the future time period.Suppose also that the consumer can borrow and lend freely and, unless otherwise specified, borrowing and lending interest rates are the same. (a) If the interest rate between time periods is 50%, what is the budget constraint between consumption in the present and consumption in the future? (B) If the interest rate at which the consumer can borrow is 75% but the rate at which she can lend is25%, what is the budget constraint? (C) Suppose the interest rate is 50%. If the consumer has to pay a fee of 10% of the loan amount in order to borrow money, what is the budget constraint?A consumer is maximising her utility function: U(x, y) = (x¹/³+y¹/³)³, subject to the budget constraint x + 3y = 100. (a) Set up the Lagrangian function of this utility maximisation problem and derive the first-order conditions. (b) What are the utility maximizing amounts of x and y? Also, calculate the Lagrange multiplier. (c) What are the utility maximising amounts of x and y if the budget constraint changes to x + 3y = 50? Also, calculate the Lagrange multiplier.. On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according to thefunctionU (c, b) = 20c - c2 +18b- 3b2.How many cigars and glasses of brandy does he consume during an evening? (Cost is no objectto J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum of glasses ofbrandy and cigars consumed to 5. How many glasses of brandy and cigars will he consumeunder these circumstances?
- Quantity of Potato Chips E Quantity of Diet Coke Refer to the figure. What point does NOT represent a possible consumption option? a) point A b) point B c) point D d) point EOn a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according tothe functionU(c, b) = 20c− c²+ 18b − 3b²a. How many cigars and glasses of brandy does he consume during an evening? (Cost isno object to J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum ofglasses of brandy and cigars consumed to 5. How many glasses of brandy and cigarswill he consume under these circumstances?Q1) Sales are a function of advertising in newspapers and magazines (X, Y). S = XY2 The price of advertising in newspapers and magazines is Rs.5 and Rs.10 respectively. The total budget for advertising is Rs.105. For maximizing sales, find out the best combination of advertisements in newspapers and magazines by using the Lagrangian multiplier. (Hint: Make equation of the budget line with the help of the above information).
- The vending machine in Katherine's office building offers cans of pop and candies. Katherine's utility function is U = 3PC, where P is the amount of pop consumed per %3D week and C is the amount of candy consumed per week. Pop costs $1 and candy costs $0.5 per bag. If Katherine has $10 to spend, she will consume A bags of candy.Question 2 David spends his budget on chocolate and chip. His utility function is given by ?(?1,?2)= 2?1?2, where ?1 is the number of chocolates he consumers per week, and ?2 is the number of chips he buys per week. A chocolate costs 10 SEK, and a chip costs 20 SEK. David’s weekly budge for consuming on these two goods is 120 SEK. (1) What is David’s budge line? Draw the budget line on a graph with chocolate amounts on the horizontal axis and chip amounts on the vertical axis. Write explicitly at which points budget line crosses the axis. (2) What is David’s marginal utilities for the two goods, respectively? What is his marginal rate of substitution between the two goods? (3) What is David’s optimal choice? Calculate the numerical answer for the optimal bundle. Also draw an indifference curve for David on the same graph as question(1) and show the optimal bundle.QUESTION 11 If the budget equation is the following 19594 x1 +8525 x2 = 10269. What is the maximum amount of x₁ that the consumer can buy? Save All