Individual consumer Individual

spending by current disposable income

$0 $20000 $40000

Andre 1000 15000 29000

Barbara 1500 12500 22500

Casey 2000 20000 38000

Declan 5000 17000 29000

Elena 4000 19000 34000

Economists observed the only five

residents of a very small economy and

estimated each one's consumer

spending at various levels of current

disposable income.

The accompanying table shows each

resident's consumer spending at three

income levels

a) What is each resident's

consumption function? What is

the marginal propensity to

consume for each resident?

b) What is the economy's

aggregate consumption function?

c) What is the marginal propensity to consume for the economy?