Question

When autonomous consumption is 75 , MPC 0.65 and Y = 1500, consumption will be :
None of these
(A)
(B)
900
(D)
1050
975
(C)​

Answer 1

Answer:

C = 1050

Explanation:

C = c`` + b(Y)

b = MPC

MPC= 0.65

C = 75 + 0.65(1500)

C = 75 + 975

C = 1050

Answer 2

Consumption (C) = 1050

Given -: °C= 75 ; b = 0.65 ; Y= 1500

To Find -: Consumption (C)

Solution:-

As we know, C = °C + b(Y)

Where, C= Consumption

°C = autonomous consumption

b = Marginal propensity to consume (MPC)

Y = Income

By putting the values in the formula

$c \: = 75 + (0.65 \times 1500)$

$c = 75 + 975$

$c = 1050$

Hence, Consumption (C) = 1050