Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![### Understanding Disposable Income and Consumption
The table given below shows the disposable income and consumption of a household. From this table, we can determine the level of savings at different levels of disposable income.
#### Table 9.1: Disposable Income and Consumption
| Disposable Income ($) | Consumption ($) |
|-----------------------|-----------------|
| 1,000 | 800 |
| 1,100 | 880 |
| 1,200 | 960 |
| 1,300 | 1,040 |
| 1,400 | 1,120 |
Based on the given data in Table 9.1, you are asked to determine the level of saving at a disposable income of $1,200.
### Question:
What is the level of saving at a disposable income of $1,200?
#### Answer Choices:
- a. $1,200
- b. $950
- c. $240
- d. $80
- e. $1,300
To determine the level of saving, you can use the following formula:
\[ \text{Saving} = \text{Disposable Income} - \text{Consumption} \]
For a disposable income of $1,200, the corresponding consumption is $960. Therefore:
\[ \text{Saving} = 1,200 - 960 = 240 \]
Thus, the correct answer to the question is:
- c. $240](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb83ccd3a-d161-43e6-8f96-e32e0a75e38e%2F62ec8f52-7cc8-4ab0-a7e5-cfaeadd6226f%2Fxssqf3_processed.png&w=3840&q=75)
Transcribed Image Text:### Understanding Disposable Income and Consumption
The table given below shows the disposable income and consumption of a household. From this table, we can determine the level of savings at different levels of disposable income.
#### Table 9.1: Disposable Income and Consumption
| Disposable Income ($) | Consumption ($) |
|-----------------------|-----------------|
| 1,000 | 800 |
| 1,100 | 880 |
| 1,200 | 960 |
| 1,300 | 1,040 |
| 1,400 | 1,120 |
Based on the given data in Table 9.1, you are asked to determine the level of saving at a disposable income of $1,200.
### Question:
What is the level of saving at a disposable income of $1,200?
#### Answer Choices:
- a. $1,200
- b. $950
- c. $240
- d. $80
- e. $1,300
To determine the level of saving, you can use the following formula:
\[ \text{Saving} = \text{Disposable Income} - \text{Consumption} \]
For a disposable income of $1,200, the corresponding consumption is $960. Therefore:
\[ \text{Saving} = 1,200 - 960 = 240 \]
Thus, the correct answer to the question is:
- c. $240
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