Question

Complete the following table:

Income (Y) (₹)	Consumption (C)	APS	MPS
0	40
50	70
100	100
150	120

Answer 1

Income (Y) (₹)	Consumption (C)	Savings (S)	APS	MPS
0	40	−40	-	-
50	70	−20	−0.40	0.40
100	100	0	0	0.40
150	120	30	0.20	0.60

Explanation:

First, calculate Saving (S) = Income (Y) - Consumption (C)

1. 0 − 40 = −40
2. 50 − 70 = −20
3. 100 − 100 = 0
4. 150 − 120 = 30

Second, calculate APS = `S/Y`

1. For Y = 0, APS is undefined (division by zero).

2. For Y = 50, APS = `-20/50` = −0.40

3. For Y = 100, APS = `0/100` = 0

4. For Y = 150, APS = `30/150` = 0.20

Third, calculate MPS = `(ΔS)/(ΔY)` between points:

1. Between Y = 0 and Y = 50:

ΔS = −20 − (−40) = 20

ΔY = 50 − 0 = 50

MPS = `20/50` = 0.4

2. Between Y = 50 and Y = 100:

ΔS = 0 − (−20) = 20

ΔY = 100 − 50 = 50

MPS = `20/50` = 0.4

3. Between Y = 100 and Y = 150:

ΔS = 30 − 0 = 30

ΔY = 150 − 100 = 50

MPS = `30/50` = 0.6