Complete the following tables:
Income Consumption Marginal Propensity to Save Average Propensity to Save
0 80 - -
100 140 - -
200 - 0 -
- 240 - 0.20
- 260 0.80 0.35

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Solution

Marginal Propensity to save refers to the percentage change in savings for every one rupee of change in the income. It is the ratio between the change in income and its corresponding change in savings.
Marginal propensity to save = ΔS/ΔY where ΔS is the Change in savings and ΔY is the change in income in the economy.

APS refers to Average Propensity to save which defines the amount of savings in every 1 rupee of income for all level of income. It is expressed as the ration of saving to income in an economy.
Average propensity to save = Savings / Income

Income

Consumption

Marginal Propensity to Save

Average Propensity to Save

Savings

0

80

-

-

-80

100

140

0.40

-0.40

-40

200

240

0

-0.20

-40

300

240

1

0.20

60

400

260

0.80

0.35

140

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