Suppose the Consumption Function Is C = $500 + 0

question 70

Multiple Choice

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, then autonomous consumption is

• A) $500.
• B) $800.
• C) $1,000.
• D) $1,300.

---

Definitions:

Luxury Watchmaker

A company or individual specialized in designing, manufacturing, and selling high-end, precision timepieces, often with a focus on craftsmanship and prestige.

Prestige

The respect and admiration that something or someone receives based on a perception of their success or quality.

Breakeven Analysis

Pricing-related technique used to determine the minimum sales volume a product must generate at a certain price level to cover all costs.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.