Suppose that C = a + bY, where C = consumption, a = consumption at zero income, b = slope, and Y = income. a. Are C and Y positively related or are they negatively related? b. If graphed, would the curve for this equation slope upward or slope downward? c. Are the variables C and Y inversely related or directly related? d. What is the value of C if a = 10, b = 0.50, and Y = 200? e. What is the value of Y if C = 100, a = 10, and b = 0.25?
Suppose that C = a + bY, where C = consumption, a = consumption at zero income, b = slope, and Y = income. a. Are C and Y positively related or are they negatively related? b. If graphed, would the curve for this equation slope upward or slope downward? c. Are the variables C and Y inversely related or directly related? d. What is the value of C if a = 10, b = 0.50, and Y = 200? e. What is the value of Y if C = 100, a = 10, and b = 0.25?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that C = a + bY, where C = consumption, a = consumption at zero income, b = slope, and Y = income. a. Are C and Y positively related or are they negatively related?
b. If graphed, would the curve for this equation slope upward or slope downward?
c. Are the variables C and Y inversely related or directly related?
d. What is the value of C if a = 10, b = 0.50, and Y = 200?
e. What is the value of Y if C = 100, a = 10, and b = 0.25?
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