16.
Helen’s consumption function may be stated as $1,000 + 0.75 × YD. If her income is $50,000, her consumption will be:
A)
37,500.
B)
$51,000.
C)
$1,000.
D)
$38,500.
E) none of the above.
My answer is A, i just want to double check if my answer is correct.
1000 + 0.75*50,000 = ...
Your answer is wrong!
Use a calculator or a spreadsheet if you can't do it by hand!!!
To find out Helen's consumption when her income is $50,000, we can substitute this value for YD (disposable income) in the consumption function and solve for the result.
Given that Helen’s consumption function is $1,000 + 0.75 × YD, and her income is $50,000, we substitute YD = $50,000 into the equation:
Consumption = $1,000 + 0.75 × $50,000
Calculating this expression results in:
Consumption = $1,000 + $37,500
Consumption = $38,500
Therefore, the correct answer is D) $38,500.