Question

Calculate APC and MPC:

$\begin{array}{cc}\text{INCOME (Y)}& \text{CONSUMPTION (C)}\\ 0& 4\\ 10& 12\\ 20& 20\\ 30& 28\\ 40& 36\end{array}$

Answer 1

$\begin{array}{cccc}\text{INCOME}& \text{CONSUMPTION}& APC=\frac{C}{Y}& \text{MPC}=\frac{\Delta C}{\Delta Y}\\ \left(Y\right)& \left(C\right)& & \\ 0& 4& \frac{4}{0}=n.d.& -\\ 10& 12& \frac{12}{10}=1.2& \frac{8}{10}=0.8\\ 20& 20& \frac{20}{20}=1& \frac{8}{10}=0.8\\ 30& 28& \frac{28}{30}=0.93& \frac{8}{10}=0.8\\ 40& 36& \frac{36}{40}=0.9& \frac{8}{10}=0.8\end{array}$