Final answer:
To calculate the value of the consumption function with an autonomous consumption of 100 and an MPC of 0.9, use the formula C = a + MPC × Y. Applying this to any level of disposable income gives the consumption at that income level.
Step-by-step explanation:
The student is asked to calculate the value of the consumption function at each level of disposable income given an autonomous consumption of a=100 and a marginal propensity to consume (MPC) of 0.9. To solve this, we can use the formula for the consumption function: C = a + MPC(Y - T), where C is consumption, a is the autonomous consumption when national income is zero, Y is national income, and T is taxes. Assuming T is zero for simplicity, the function simplifies to C = a + MPC × Y. For any given level of disposable income Y, consumption can be calculated by adding autonomous consumption to the product of the MPC and the disposable income Y.
For example, if the disposable income Y is $1,000, the consumption function would be: C = 100 + 0.9 × $1,000 = 100 + 900 = $1,000. Therefore, if this student's disposable income were $1,000, their consumption would be $1,000 based on the given parameters.