Question : The consumption function is given by C = 500 + 0.75Y. If disposable income is INR 4,000, what is the level of consumption?
Option 1: INR 3,500
Option 2: INR 4,500
Option 3: INR 6,000
Option 4: INR 7,500
Correct Answer: INR 3,500
Solution : The correct answer is A) INR 3,500
To find the level of consumption, we can substitute the given disposable income (Y) of INR 4,000 into the consumption function:
C = 500 + 0.75Y
= 500 + 0.75 * INR 4,000
= 500 + INR 3,000
= INR 3,500
Therefore, the level of consumption when the disposable income is INR 4,000 is INR 3,500
Question : The average propensity to consume (APC) is 0.75. If disposable income is INR 6,000, what is the level of consumption?
Option 1: INR 4,000
Option 3: INR 6,500
Option 4: INR 8,000
Question : The consumption function is given by C = 600 + 0.8Y. If disposable income is INR 3,000, what is the level of consumption?
Option 1: INR 1,800
Option 2: INR 3000
Option 3: INR 4,200
Option 4: INR 4,800
Question : The saving function is given by S = 0.4Y - 300. If disposable income is INR 2,500, what is the level of saving?
Option 1: INR 400
Option 2: INR 500
Option 3: INR 700
Option 4: INR 1,000
Question : The saving function is given by S = 0.2Y - 100. If disposable income is INR 2,000, what is the level of saving?
Option 1: INR 300
Option 2: INR 400
Option 3: INR 500
Option 4: INR 600
Question : The saving function is given by S = 0.3Y - 200. If disposable income is INR 1,500, what is the level of saving?
Option 1: INR 250
Option 3: INR 800
Option 4: INR 950
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