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प्रश्न
Define or explain the following concept.
Autonomous Consumption.
उत्तर
Autonomous Consumption.
(i) Consumption is that part of income which is spent on purchasing goods and services. Autonomous consumption refers to the types of consumption which is independent of income. It is income inelastic.
(ii) Autonomous consumption can never be zero. Even at a zero income level, there is some positive autonomous consumption.
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संबंधित प्रश्न
............... consumption can not be zero.
(Induced / Autonomous / Government / Private)
Marginal propensity to consume + marginal propensity to save ......................... '
(zero \ one \ less \ more)
Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.
In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.
Define marginal propensity to consume
Complete the following table:-
| Income (Rs) | Consumption expenditure (Rs) | Marginal propensity to save | Average propensity to save |
| 0 | 80 | ||
| 100 | 140 | 0.4 | ....... |
| 200 | ........ | ...... | 0 |
| ....... | 240 | ........ | 0.20 |
| ......... | 260 | 0.8 | 0.35 |
Find equilibrium national income:
Autonomous consumption expenditure = 120
Marginal propensity to consume = 0.9
Investment expenditure = 1100
An economy is in equilibrium. Find marginal propensity to consume :
Autonomous consumption
Expenditure = 100
Investment expenditure = 100
National Income = 2,000
The value of marginal propensity to consume is 0.6 and initial income in the economy is Rs 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of Rs 80 crores.
An economy is in equilibrium. From the following data about an economy, calculate investment expenditure:
1) Income = 10000
2) Marginal propensity to consume = 0.9
3) Autonomous consumption = 100
An economy is in equilibrium. From the following data, calculate the marginal propensity to save:
1) Income = 10,000
2) Autonomous consumption = 500
3) Consumption expenditure = 8,000
An economy is in equilibrium. Find 'autonomous consumption' from the following:
National income = 1000
Marginal propensity to consume = 0.8
Investment expenditure = 100
An economy is in equilibrium. Find Marginal Propensity to Consume from the following:
National income = 2000
Autonomous consumption = 400
Investment expenditure = 200
An economy is in equilibrium. Calculate the Marginal Propensity to Save from the following:
National Income = 1000
Autonomous Consumption = 100
Investment = 120
An economy is in equilibrium. Calculate Autonomous Consumption from the following :
National Income = 1,250
Marginal Propensity to Save = 0.2
Investment Expenditure = 150
An economy is in equilibrium. Find the Investment Expenditure from the following :
National Income = 750
Autonomous Consumption = 200
Marginal Propensity to Save = 0.4
Complete the following table:
|
Consumption expenditure (Rs) |
Savings (Rs) |
Income (Rs) |
Marginal propensity to Consume |
|
100 |
50 |
150 |
|
|
175 |
75 |
……. |
…… |
|
250 |
100 |
……. |
…… |
|
325 |
125 |
……. |
…… |
Answer the following question :
Explain the types of investment expenditure.
Define or explain the concept Average propensity to save .
Give reasons or explain the following statement:
Income which is not saved is consumption.
Match the following Group ‘A’ with Group ‘B’:
| Group ‘A’ | Group ‘B’ | ||
| (a) | Giffen’s goods | (1) | Uses of commodities |
| (b) | Essential commodities | (2) | Keynes |
| (c) | Consumption | (3) | Primary function of bank |
| (d) | Consumption function | (4) | Inferior goods |
| (e) | Accept deposits | (5) | Money lender |
|
|
(6) | Inelastic demand | |
|
|
|
(7) | Luxurious commodities |
|
|
|
(8) | Dr. Marshall |
State whether the following statements are True or False with reasons:
Increase in consumption expenditure is less than increase in income.
Choose the correct answer :
When income increases consumption and saving will _________.
Distinguish between Average propensity to consume and Marginal propensity to consume.
Suppose in a hypothetical economy, the income rises from ₹ 5,000 crores to ₹ 6,000 crores. As a result, the consumption expenditure rises from ₹ 4,000 crores to ₹ 4,600 crores. Marginal propensity to consume in such a case would be __________.
The consumption function of an economy is : C = 40 + 0.8 Y (amount in ₹ crores). Determine that level of income where the average propensity to consume will be one.
Answer the following question.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
An economy is in equilibrium. From the following data calculate investment expenditure :
(i) Marginal propensity to consume = 0·9
(ii) Autonomous consumption = 200
(iii) Level of income = 10000
Answer the following question.
In an economy, investment increased by 1,100 and as a result of it income increased by 5,500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
Calculate the change in final income, if Marginal Propensity to Consume (MPC) is 0.8 and change in initial investment is ₹ 1,000 crores.
The relation between APC and MPC in Keynes Psychological consumption function is ______.
Which or is true?
Which one is correct?
Which of the following is correct?
Calculate Change in Income (ΔY) for a hypothetical economy. Given that:
- Marginal Propensity to Consume (MPC) = 0.8, and
- Change in Investment (ΔI) = Rs. 1,000 crores
Which of the following statement is true?
MPC = 1 − MPS. It is ______
Marginal Propensity to Save is equal to ______
Calculate Autonomous Consumption expenditure from the following data about an economy which is in equilibrium:
National Income = Rs 1,200
Marginal Propensity to Save = 0.20
Investment expenditure = Rs 100
The sum of MPC and MPS is always equal to _____
If MPC is 0.9, what is the value of the multiplier? How much investment is needed to increase national income by Rs 5,000 Crores
Why public goods must be provided by the government?
Identify the correct pair of from the following Columns I and II:
| Columns I | Columns II |
| 1. Total Product increases at an increasing rate and Marginal Product rises till it reaches its maximum point. | (a) Second Stage |
| 2. Total product increases at a decreasing rate and reaches maximum, and MP becomes zero. | (b) First Stage |
| 3. Total product also decreases and marginal product (MP) becomes negative. | (c) Third Stage |
| 4. Improvement in technique of production and discovery of fixed factor substitute can postpone the operation of law for some time. | (d) Fourth Stage |
What is saving per Income called?
If MPS = 0, the value of multiplier will be ______
When we add up utility derived from consumption of all the units of the commodities, we get:
Average Propensity to Consume is equal to:
Identify the correctly matched pair from Column A to that of Column B:
| Column A | Column B | ||
| (1) | MPC | (a) | Ratio of Savings to Consumption |
| (2) | APC | (b) | Ratio of Consumption to Income |
| (3) | APS | (c) | Ratio of Consumption to Savings |
| (4) | MPS | (d) | Ratio of Savings to Investment |
Identify the correctly matched pair from Column A to column B:
| Column A | Column B |
| (1) MPC = 0 | (a) K > 1 |
| (2) MPC = 1 | (b) K = Infinity |
| (3) MPC < 1 | (c) K = 0 |
| (4) MPC > MPS | (d) K < 1 |
If increase in National Income is equal to increase in consumption, identity the value of Marginal Propensity to Save:
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
In an economy 75 percent of the increase in income is spent on consumption. Investment increased by ₹ 1,000 crore.
Calculate the total increase in income on the basis of given information.
Assertion (A): At the break-even level of income, the value of Average Propensity to Consume (APC) is zero.
Reason (R): Sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one.
What is meant by autonomous consumption expenditure? Show it on a diagram.
When National Income rises from ₹ 600 Cr. to ₹ 1000 Cr., the consumption expenditure increases from ₹ 500 Cr. to ₹ 800 Cr. Calculate MPC and hence the value of Investment Multiplier.
