Given a consumption function of C = $25 +0.75 YD, if disposable income is $1,000, then the average propensity to consume equals Multiple Choice O 1.0. 0.6. 1.6. 0.4.

Suppose a change in income of $5,100 causes a change in consumption of $2,600. What is the MPS?   Multiple Choice   0.51   0.49   0.31   0.69

Use Lagrange multipliers to find expressions for x, and x₂ which maximise the utility function U = x/² + x1/² subject to the general budgetary constraint P₁x₁ + P₂x₂ = M

Course: Introduction to Microeconomics Topic: Intertemporal Consumption DecisionsA consumer makes decision to consume in this year and next year. This year she has an income of M1 = $ 1.5 million and next year her income will be M2 = $ 2.75 million. Interest rate is 10%. Her intertemporal preferences are represented by function U(c1, c2) = c1*c2, whose intertemporal marginal rate of substitution is IMRS = c2/c1.a) Find and graph Budget Constraintb) Find and graph  optimal consumption basket and indicate whether the consumer SAVES or BORROWS in the FIRST YEAR.c) Indicate whether following statement is true or false: "Any increase in interest rate will cause a decrease in consumer's welfare" Justify.d) If next year's income is maintained, how much would this year's income have to be for consumer to neither save nor borrow money at 10% interest rate?e) How much would interest rate have to be for consumer to consume exactly her initial endowment          (M1 = $ 1.5 million and M2 = $ 2.75…