Final answer:
The equation of the line that represents the relationship between disposable income and consumption expenditure for Ethiopia, given two points, is y = 0.92x + 24.96. This line represents the pattern of consumption expenditure as it relates to disposable income.
Step-by-step explanation:
To find the equation of the line that represents the relationship between disposable income and consumption expenditure for Ethiopia, we start by identifying two points through which the line passes: (312, 295) and (575, 537). The general form of the equation of a line is y = mx + b, where m is the slope of the line and b is the y-intercept.
First, calculate the slope (m) - the change in consumption expenditure divided by the change in disposable income:
m = ∆y / ∆x = (537 - 295) / (575 - 312) = 242 / 263 ≈ 0.92
Next, we can use either of the given points and the slope to find the y-intercept (b). Let's use point (312, 295):
295 = 0.92 × 312 + b
Solving for b, we get:
b = 295 - (0.92 × 312) ≈ 24.96
So the equation of the line is:
y = 0.92x + 24.96
This line equation can be interpreted as representing the consumption expenditure pattern in relation to disposable income in Ethiopia in recent years. For every million dollars of disposable income, the consumption expenditure increases by approximately 0.92 million dollars, with an initial expenditure (when income is zero) of about 24.96 million dollars. This reveals consumption's dependency on disposable income and might reflect the economic behavior of households in Ethiopia during the period considered.