Question

Use the table below to answer the next four questions. Disposable Income Consumption Spending $500 $900 $1,300 $1,700 $2,100 $2,500 $0 $500 $1,000 $1,500 $2,000 $2,500 In the above example, autonomous consumption is: 16. $2,500. $0. с. а. impossible to determine $500 b. d. In the above example, saving is zero at income cqual to: $2,000. $2,500 17. $0. $500. C. a. b. d. In the above example, the marginal propensity to consume is 18. 0 0.75 0.5 a. c. b. d. 0.80

Answer 1

16)

Autonomous consumption is 500

(b) is correct option.

17)

when consumption equals to income then saving is equal to zero  

Thus, when income is 2500 then saving is zero

(d) is correct option

18)

MPC =  $\Delta$C/$\Delta$Y

$\Delta$C = 400

$\Delta$Y = 500

MPC = 400/500

= 0.80

(d) is correct option.