Consider the consumption function: C = 120+ 0.8Yd where Yd is disposable income. a) Write down expressions for C, in terms of national income Y, when there is: i. No tax ii. A lump sum tax of £100 iii. A proportional tax in which the proportion is 0.25. b) Sketch all three functions on the same diagram, over the range 0≤Y≤800, and briefly describe any differences or similarities between them.

Consider the consumption function: C = 120+ 0.8Yd where Yd is disposable income. a) Write down expressions for C, in terms of national income Y, when there is: i. No tax ii. A lump sum tax of £100 iii. A proportional tax in which the proportion is 0.25. b) Sketch all three functions on the same diagram, over the range 0≤Y≤800, and briefly describe any differences or similarities between them.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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