"There is minimum consumption, even when the income level is zero". Defend or refuse.

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Solution

1.Autonomous consumption refers to that consumption that occurs when there is no income in the economy. It is the minimum level of consumption that takes place in the economy which is the basic necessity of life.

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Similar questions

The ratio of MPC and MPS is 4:1. The consumption at zero level of income is Rs. 40 crores.

(a) Frame a consumption equation

(b) Value of multiplier

The consumption equation is C = 125 + 0.5Y.
(a) Calculate break-even level of income.
(b) Calculate investment if the equilibrium level of income is Rs. 400 crores.

Q. ___________________ is consumption at zero level of income.

Q. On the basis of given diagram, answer the following questions:
(i) What is the value of autonomous consumption?
(ii) What is the break-even level of Income or at what level of income saving is zero?
(iii) How much is APC corresponding to point E?
(iv) If MPC = 0.6, determine the consumption and saving function.

Q. When income is zero consumption is also zero.

Calculate Investment expenditure:

National income = 700

Autonomous consumption = 70

MPC = 0.8

Calculate equilibrium level of income from the following:

Consumption expenditure at zero level of income = 60

MPC = 0.9

Investment =100

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