Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Question

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Answer 1

Question

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

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07:33

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16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

Answer 2

Question

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

07:33

Answer 3

Question

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

07:33

Answer 4

Question

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

07:33

Answer 5

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 6

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 7

Chapter 9, Problem 1.1P

Sub- Part

A

To determine

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Answer 8

Sub- Part

A

Expert Solution

Explanation of Solution

(a) − Following graph shows the consumption function in an economy.

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 1

Sub- Part

Answer 9

Sub- Part

A

Expert Solution

Answer 10

Sub- Part

A

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 13

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 14

B

To determine

Based on the data, to find:

Slope, if consumption function is a straight line

Answer 15

B

Expert Solution

Explanation of Solution

In case of a straight line, slope of the line remains constant or same everywhere along the line. So, if the consumption function is a straight line then its slope will remain same everywhere along it. The difference between two level of income and consumption will be constant. The slope of consumption function can be calculates as follows −

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 2

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 3

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 4

Thus, the slope of given consumption function is 0.5.

Sub- Part

Answer 16

B

Expert Solution

Answer 17

B

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 20

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 21

C

To determine

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.

Answer 22

C

Expert Solution

Explanation of Solution

If the saving function is a straight line then its slope will remain constant. Difference between two level of income and saving will remain constant along the saving function. As saving function is a straight line, change in saving and income would be the same. Thus, the slope of saving function would be:

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 5

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 6

ECON MACRO, Chapter 9, Problem 1.1P , additional homework tip 7

Real Disposable Income (in billion $)	Consumption Expenditure (in billion $)	Savings (in billion $)
100	150	-50
200	200	0
300	250	50
400	300	100

Answer 23

C

Expert Solution

Answer 24

C

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

Answer 27

Ch. 9 - Prob. 1.1P Ch. 9 - Prob. 1.2P Ch. 9 - Prob. 1.3P Ch. 9 - Prob. 2.4P Ch. 9 - Prob. 2.5P Ch. 9 - Prob. 3.6P Ch. 9 - Prob. 3.7P Ch. 9 - Prob. 4.8P Ch. 9 - Prob. 4.9P Ch. 9 - Prob. 5.10P

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Based on the data, Graphical representation of consumption function, with consumption spending on vertical axis and disposable income on horizontal axis.

Explanation of Solution

Based on the data, to find: Slope, if consumption function is a straight line

Explanation of Solution

Based on the data, Find the Savings at each level of income and the slope when the saving function is a straight line.

Explanation of Solution

Want to see more full solutions like this?

Chapter 9 Solutions

Based on the data, to find:

Slope, if consumption function is a straight line

Based on the data,

Find the Savings at each level of income and the slope when the saving function is a straight line.