JAMB 2017 Economics · Question 29

Given a consumption function C = 10 + 0.6Y, determine the value of C if Y is 20

Options

A.36.60
B.22.00
C.30.60
D.26.00

Answer: B. 22.00

Explanation written with AI and checked against the answer key

Analyze the question: You're given a linear consumption function, C = 10 + 0.6Y. Here 10 is autonomous consumption (spending even when income is zero) and 0.6 is the marginal propensity to consume (MPC). You need C when income Y = 20. Concept: Substitute the value of Y into the function and compute. Solution: C = 10 + 0.6Y C = 10 + 0.6(20) C = 10 + 12 C = 22 Answer: The correct option is B. 22. **Tip: In consumption function questions, always multiply the MPC by Y first, then add autonomous consumption. Don't let the other options distract you. Values like 36.60 or 30.60 come from wrongly adding or mis-multiplying decimals. A quick check: 0.6 of 20 is just 60% of 20, which is 12, so 10 + 12 = 22.

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