a. Explain the importance of break-even analysis in a small business. (6 marks)
b. You are given consumption function: C= 120+ 0.75Yd where Yd is disposable income. You are also given the following information: Yd= Y-T and that T= tY. Where Y is total income; T, total tax; and t, tax rate.
i. Express consumption C, as a function of total income, Y.
ii. Find the level of C, if t=0.3 and Y= 5000 (9 marks)
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