The above table has data on the consumption function in the

The above table has data on the consumption function in the nation of Mojo. a. what is the amount of autonomous consumption expenditure?

Solution

a.)Autonomous consumption is consumption when income is 0.

From table,when income is 0,consumption expenditure is 0.8

b.) Marginal propensity to consume(MPC)=(change in consumption)/(change in income)

Take any case say, from table, if income rises from 1.0 to 2.0,consumption rises from 1.6 to 2.4

MPC=(2.4-1.6)/(2.0-1.0)=0.8