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Economists observed the only five residents

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3. Economists observed the only five residents of a very small economy and estimated each one's consumer spending at various levels of current disposable income. The accompanying table shows each resident's consumer spending at three income levels.;Individual consumer spending by Individual Current disposable income;$0 $20,000 $40,000;Andre 1,000 $15,000 29,000;Barbara 2,500 12,500 22,500;Casey 2,000 20,000 38,000;Declan 5,000 17,000 29,000;Elena 4,000 19,000 34,000;a) What is each resident's consumption function? What is the marginal propensity to consumer for each resident?;C = A + MPC x YD;The aggregate consumption function illustrates the relationship between the aggregate disposable income in an economy and the level of aggregate consumer spending.;b) What is the economy's aggregate consumption function? What is the marginal propensity to consumer for the economy?;There

 

Paper#24673 | Written in 18-Jul-2015

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