Question

Given that C = $7,000+ 0.05 Yd, if the level of disposable income is $14,000, the level of consumption is Multiple Choice

a) $7,315
b) $6,300
c) $7,700
d) None of these options are correct.
e) $350

Answer 1

The consumption level, given the disposable income of $14,000 using the formula C = $7,000 + 0.05 Yd, is found to be $7,700.

Step-by-step explanation:

The student asked about the level of consumption given the formula C = $7,000+ 0.05 Yd and a level of disposable income (Yd) of $14,000. To calculate the consumption level, we use the given function by plugging in the value of Yd:

C = $7,000 + 0.05 × $14,000
C = $7,000 + $700
C = $7,700

Therefore, the correct level of consumption is $7,700, which corresponds to option c).