HSC Commerce 12th Board ExamMaharashtra State Board
Share
Notifications

View all notifications
Books Shortlist
Your shortlist is empty

# The Consumption Expenditure Ec of a Person with the Income X. is Given by Ec = 0.0006x2 + 0.003x Find Mpc, Mps, Apc and Aps When the Income X = 200. - HSC Commerce 12th Board Exam - Mathematics and Statistics

Login
Create free account

Forgot password?
ConceptIncreasing and Decreasing Functions

#### Question

The consumption expenditure Ec of a person with the income x. is given by Ec = 0.0006x2 + 0.003x
Find MPC, MPS, APC and APS when the income x = 200.

#### Solution

The expenditure EC of a person with income x is
given by

EC = [0.0006]x^2 + [0.003]x

So, marginal propensity to consume (MPC) = d E_c/(dl)

∴ MPC = (d E_c)/d_x= 2 (0.0006) x +
(0.003)

= 0.0012 x + 0.003
MPC at  x = 200 is

=0.0012(200)+0.003

=0.24+0.003

=0.243

As MPC + MPS = 1
MPS = 1 – MPC
= 1 – 0.0243
= 0.757

Now APC=E_C/x

= 0.0006 x + 0.003
At x = 200
APC = 0.0006 × 200 + 0.003
= 0.12 + 0.003
= 0.123
As APS = 1 – APC
= 1 – 0.123
= 0.877

Is there an error in this question or solution?

#### APPEARS IN

2017-2018 (March) (with solutions)
Question 2.2.3 | 4.00 marks

#### Video TutorialsVIEW ALL 

Solution The Consumption Expenditure Ec of a Person with the Income X. is Given by Ec = 0.0006x2 + 0.003x Find Mpc, Mps, Apc and Aps When the Income X = 200. Concept: Increasing and Decreasing Functions.
S