For part F **Math It Graph It Write It****Consumption and Savings Functions**Table:| Disposable Income | Consumption | Saving ||-------------------|-------------|--------|| 0 | 50 | -50 || 100 | 100 | 0 || 200 | 150 | 50 || 300 | 200 | 100 || 400 | 250 | 150 |Questions:a. Please complete the table (assume linear functions). b. How much is Autonomous Consumption and Autonomous Savings? c. How much is mpc, mps, and Eₐ? d. Write out the consumption function and the savings function. e. Using the data from the table, please graph the consumption and savings schedules in a model. f. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure.---**Solutions and Notes:**b. **Autonomous Consumption and Savings:**- Autonomous consumption = 50- Autonomous savings = -50c. **Marginal Propensities:**- MPC (Marginal Propensity to Consume) = Δ in consumption / Δ in income = 50 / 100 = 0.5- MPS (Marginal Propensity to Save) = 1 - MPC = 1 - 0.5 = 0.5- The spending multiplier $ E_m $ = $ \frac{1}{1 - MPS} = \frac{1}{0.5} = 2 $d. **Functions:**- Consumption function $ C = 50 + 0.5Y_d $- Savings function $ S = -50 + 0.5Y_d $e. **Graphs:**1. **Consumption Graph:** - The graph is a straight line starting from the y-axis at 50 and rising with a slope of 0.5 with respect to disposable income (Y_d). 2. **Savings Graph:** - The graph starts at -50 on the y-axis and rises with a slope of 0.5 crossing the x-axis when savings are 0 at a disposable income of 100.f. **Planned Expenditure:**- Shows an iterative process of calculating increases in planned expenditure with a change of $

Math It Graph It Write It Consumption and Savings Functions Disposable Income Consumption Saving 50 100 150 -50 100 700 300 so 100 150 200 400 250 a. Please complete the table (assume linear functions). dy remainsat How much is Autonomous Consumption and Autonomous Savings? AOccur uhoN b. How much is mpc, mps, and E_? Write out the consumption function and the savings function. Using the data from the table, please graph the consumption and savings schedules in a model. f. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure. B. Autonamus consumptia50 Ausonomas saring's=-50 Ain consmias A in in come Co MPC=4 TOo

Math It Graph It Write It Consumption and Savings Functions Disposable Income Consumption Saving 50 100 150 -50 100 700 300 so 100 150 200 400 250 a. Please complete the table (assume linear functions). dy remainsat How much is Autonomous Consumption and Autonomous Savings? AOccur uhoN b. How much is mpc, mps, and E_? Write out the consumption function and the savings function. Using the data from the table, please graph the consumption and savings schedules in a model. f. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure. B. Autonamus consumptia50 Ausonomas saring's=-50 Ain consmias A in in come Co MPC=4 TOo

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For part F

**Math It Graph It Write It**

**Consumption and Savings Functions**

Table:

| Disposable Income | Consumption | Saving |
|-------------------|-------------|--------|
| 0 | 50 | -50 |
| 100 | 100 | 0 |
| 200 | 150 | 50 |
| 300 | 200 | 100 |
| 400 | 250 | 150 |

Questions:

a. Please complete the table (assume linear functions).
b. How much is Autonomous Consumption and Autonomous Savings?
c. How much is mpc, mps, and Eₐ?
d. Write out the consumption function and the savings function.
e. Using the data from the table, please graph the consumption and savings schedules in a model.
f. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure.

---

**Solutions and Notes:**

b. **Autonomous Consumption and Savings:**

- Autonomous consumption = 50
- Autonomous savings = -50

c. **Marginal Propensities:**

- MPC (Marginal Propensity to Consume) = Δ in consumption / Δ in income = 50 / 100 = 0.5
- MPS (Marginal Propensity to Save) = 1 - MPC = 1 - 0.5 = 0.5
- The spending multiplier $ E_m $ = $ \frac{1}{1 - MPS} = \frac{1}{0.5} = 2 $

d. **Functions:**
- Consumption function $ C = 50 + 0.5Y_d $
- Savings function $ S = -50 + 0.5Y_d $

e. **Graphs:**
1. **Consumption Graph:**
- The graph is a straight line starting from the y-axis at 50 and rising with a slope of 0.5 with respect to disposable income (Y_d).

2. **Savings Graph:**
- The graph starts at -50 on the y-axis and rises with a slope of 0.5 crossing the x-axis when savings are 0 at a disposable income of 100.

f. **Planned Expenditure:**
- Shows an iterative process of calculating increases in planned expenditure with a change of $

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