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Question
Calculate MPC, APC, MPS and APS from the following data:
| Income | Consumption |
| (₹) | (₹) |
| 800 | 720 |
| 1,000 | 800 |
Numerical
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Solution
MPC = `(ΔC)/(ΔY)`
= `(800-720)/(1000-800)`
= `80/200`
= 0.4
MPS = 1 − MPC
= 1 − 0.4
= 0.6
APC = `C/Y`
At ₹ 800 income:
APC = `720/800`
= 0.9
At ₹ 1,000 income:
APC = `800/1000`
= 0.8
APS = 1 − APC
At ₹ 800 income:
APS = 1 − 0.9
= 0.1
At ₹ 1,000 income:
APS = 1 − 0.8
= 0.2
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