Data on before-tax income, taxes paid, and consumption spending for the Bens family in various years are given below:

Before-Tax Income ($)Taxes paid ($)Consumption Spending ($)
25,0003,00020,000
27,0003,50021,350
28,0003,70022,070
30,0004,00023,600

a.Graph the Bens consumption function and find their households marginal propensity to consume.

b.How much would you expect the Bens to consume if their income was $32,000 and they paid taxes of $5,000? In other words, find Bens marginal propensity to consume. (Hint: a multiple-step problem)

c.Ben wins a lottery prize. As a result, the Ben family increases its consumption by $1,000 at each level of after-tax income. (Income does not include the prize money.) How does this change their consumption function? How does it affect their marginal propensity to consume?