Question

If the consumption function is of the form C = 80 + 0.4Y, consumption at an income level of 200 is

Answer 1

To find the consumption at an income level of $200 using the consumption function C = 80 + 0.4Y, replace Y with 200 to get C = 160. Therefore, the consumption is $160.

Step-by-step explanation:

The student is asking about the calculation of consumption at a given income level using a consumption function. The formula provided is C = 80 + 0.4Y, where C represents the consumption and Y represents the national income. To calculate consumption at an income level of $200, we substitute 200 for Y in the equation:

C = 80 + 0.4 * 200

C = 80 + 80

C = 160

So, the consumption at an income level of $200 is $160.