4.1.1 - Consumption
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Practice Questions
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Define autonomous consumption.
💡 Hint: Think about spending that happens without income.
What does MPC stand for?
💡 Hint: You can derive this from marginal change.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the consumption function describe?
💡 Hint: It involves spending and earnings.
True or False: Autonomous consumption occurs only when income is above zero.
💡 Hint: Consider basic needs.
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Challenge Problems
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Given that a family's income increases by Rs. 500 and their MPC is 0.9, calculate how much they will consume and how much they will save.
💡 Hint: Use the MPC to determine consumption.
If national income rises and consumption does not increase proportionately, what impact could this have on the overall economy?
💡 Hint: Think about demand and supply balance dynamics.
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