Question : MPC being equal to 0.5, what will be C, if income increases by INR 100?
Option 1: 60
Option 2: 50
Option 3: 40
Option 4: 70
Correct Answer: 50
Solution : The correct answer is (b) 50
The marginal propensity to consume (MPC) of 0.5 indicates that for every additional unit of income, 0.5 units will be consumed.
Given that income increases by INR 100, we can calculate the change in consumption (ΔC) using the MPC:
ΔC = MPC * ΔY
ΔC = 0.5 * 100
ΔC = 50
Therefore, the change in consumption (ΔC) is INR 50.
To find the new level of consumption (C), we add the change in consumption (ΔC) to the initial level of consumption:
C = Initial Consumption + ΔC
If the initial consumption level is not provided, we cannot determine the exact value of C. However, if we assume that the initial consumption level is zero, then:
C = 0 + 50
C = 50
Question : If Chetan's present income is INR 40,000 and it increases by 1% annually, then what will be his income 2 years from now?
Option 1: INR 50,800
Option 2: INR 58,000
Option 3: INR 40,804
Option 4: INR 44,854
Question : Raman spends 75% of his income. If his income increases by 20% and expenditure also increases by 10%, then by what percent will Raman's savings increase?
Option 1: 35%
Option 2: 40%
Option 3: 50%
Option 4: 45%
Question : If the price of a product increases from INR 50 to INR 60 per unit, and the quantity demanded decreases from 100 units to 80 units, calculate the price elasticity of demand.
Option 1: 0.5
Option 2: 1.0
Option 3: 1.5
Option 4: 2.0
Question : Renu saves 20% of her income. If her expenditure increases by 20% and income increases by 29%, then her savings increases by:
Option 1: 55%
Option 2: 65%
Option 3: 54%
Option 4: 60%
Question : A saves 18% of his income. If his income increases by 41% and still saves the same amount. Find the percentage increase in his expenditure.
Option 1: 60%
Option 2: 35%
Option 4: 40%
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