$$\begin{array}{l}
\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Disposable Income } \
\text { (Billions of dollars per year) }
\end{array} & \begin{array} { c }
\text { Total Consumption } \
\text { (Billions of dollars per year) }
\end{array} \
\hline \$ 0 & \$ 50 \
\hline 200 & 210 \
\hline
\end{array}\
\text { Table } 9.1
\end{array}$$ At which income level does consumption equal income in Table 9.1?
A)$150 billion.
B)$600 billion.
C)$900 billion.
D)$250 billion.

Question

$$\begin{array}{l}
\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Disposable Income } \
\text { (Billions of dollars per year) }
\end{array} & \begin{array} { c } 
\text { Total Consumption } \
\text { (Billions of dollars per year) }
\end{array} \
\hline \$ 0 & \$ 50 \
\hline 200 & 210 \
\hline
\end{array}\
\text { Table } 9.1
\end{array}$$ At which income level does consumption equal income in Table 9.1?
A)$150 billion.
B)$600 billion.
C)$900 billion.
D)$250 billion.

Quizplus · Accepted Answer

At $250 billion, consumption equals income because the consumption function starts at $50 billion when income is $0, and increases by $0.80 for every additional dollar of income. Thus, at $250 billion, consumption will be $250 billion.

At Which Income Level Does Consumption Equal Income in Table