Calculate MPC and MPS from the following schedule:
Income (Y) 100 200 300 400 500
Consumption (C) 85 160 235 310 400

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Solution

Income (Y)

100

200

300

400

500

Consumption (C)

85

160

235

310

400

Savings(S)

15

40

65

90

100

MPC

-

7.5

7.5

7.5

9

-

2.5

2.5

2.5

1

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Investment =100

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((i) MPC = 0.8; MPS =0.2; (ii) Autnomous Consumption = 1200 crows (iii) S = -200 + 0.20Y (iv) Rs. 2,600 crams and Rs. 4,200 crores; (v) Rs. 1,000 crores)

Q. If MPC is four times MPS and consumption at zero level of income is Rs. 70 crores, derive the consumption function. (C = 70 + 0.80 Y)

The ratio of MPC and MPS is 4:1. The consumption at zero level of income is Rs. 40 crores.

(a) Frame a consumption equation

(b) Value of multiplier

The consumption equation is C = 125 + 0.5Y.
(a) Calculate break-even level of income.
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Q. The consumption expenditure

E_{c}

of a person with the income x, is given by

E_{c} = 0.0006 x^{2} + 0.003 x

. Find MPC, MPS, APC and APS when the income

x = 200.

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Income (Y)	100	200	300	400	500
Consumption (C)	85	160	235	310	400
Savings(S)	15	40	65	90	100
MPC	-	7.5	7.5	7.5	9
	-	2.5	2.5	2.5	1

Calculate MPC and MPS from the following schedule: Income (Y)100200300400500 Consumption (C)85160235310400

Income (Y) 100 200 300 400 500 Consumption (C) 85 160 235 310 400 Savings(S) 15 40 65 90 100 MPC - 7.5 7.5 7.5 9 - 2.5 2.5 2.5 1

Calculate MPC and MPS from the following schedule:
Income (Y) 100 200 300 400 500
Consumption (C) 85 160 235 310 400

Income (Y)

100

200

300

400

500

Consumption (C)

85

160

235

310

400

Savings(S)

15

40

65

90

100

MPC

-

7.5

7.5

7.5

9

-

2.5

2.5

2.5

1