Question

11. Find autonomous consumption and total consumption when saving function is S = -100 +0.5Y and Y=1500​

Answer 1

Answer:

c= 850

autonomous consumption=100

Explanation:

we know that MPS =1-MPC

we know that autonomous consumption is equal to saving but different signs

-100 saving= -(-100) autonomous consumption= 100

Answer 2

The c=850 in the given question 100 percent self-consumption.

Explanation:

• We know that one MPS equals one MPC.
• We all know that independent consumption is the same as saving, but the indicators are different.

• -100 saving= -(-100) autonomous consumption= 100

S= c +b(y)

hence,

C= -(-100)= 100

C+b(y)

⇒100 - (1-0.5)1500   [MPS=I-MPC]

⇒100+(0.5)1500

⇒100 + 5/19 ×1500

⇒100+750= 850

C=850