Question
Find the elasticity of consumption with respect to income, and show that it equals MPC/APC
4. Let and
Find, and the Cartesian Product of X and Y.
Answer :
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The elasticity of consumption with respect to income is defined as the percentage change in consumption divided by the percentage change in income: [ E_C = \frac{dC/C}{dY/Y} = \frac{dC}{dY} \cdot \frac{Y}{C}.
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