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प्रश्न
Distinguish between Average propensity to consume and Marginal propensity to consume.
उत्तर
Average propensity to consume and Marginal propensity to consume.
| Basis of difference | Average propensity to consume | Marginal propensity to consume |
| Meaning | It shows the ratio of consumption expenditure to the level of income | It refers to the ratio of change in the consumption expenditure to the change in the disposable income |
| Formula | `APC=C/Y` | `MPC=(ΔC)/(ΔY)` |
APPEARS IN
संबंधित प्रश्न
............... consumption can not be zero.
(Induced / Autonomous / Government / Private)
In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.
Define marginal propensity to consume
Find equilibrium national income:
Autonomous consumption expenditure = 120
Marginal propensity to consume = 0.9
Investment expenditure = 1100
An economy is in equilibrium. Find investment expenditure:
National Income =1,000
Autonomous Consumption =100
Marginal propensity to consume =0.8
Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
The value of marginal propensity to consume is 0.6 and initial income in the economy is Rs 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of Rs 80 crores.
An economy is in equilibrium. From the following data about an economy, calculate investment expenditure:
1) Income = 10000
2) Marginal propensity to consume = 0.9
3) Autonomous consumption = 100
Assuming that increase in investment is Rs. 800 crore and marginal propensity to consume is 0.8, explain the working of multiplier
An economy is in equilibrium. Find 'autonomous consumption' from the following:
National income = 1000
Marginal propensity to consume = 0.8
Investment expenditure = 100
An economy is in equilibrium. Find Marginal Propensity to Consume from the following:
National income = 2000
Autonomous consumption = 400
Investment expenditure = 200
An economy is in equilibrium. Calculate the Investment Expenditure from the following
National Income = 800
Marginal propensity to save = 0.3
Autonomous Consumption = 100
Calculate Marginal Propensity to Consume from the following data about an economy
Which is an equilibrium:
National income = 2000
Autonomous Consumption expenditure = 200
Investment expenditure = 100
An economy is in equilibrium. Find the Investment Expenditure from the following :
National Income = 750
Autonomous Consumption = 200
Marginal Propensity to Save = 0.4
Fill in the blank with appropriate alternatives given in the bracket:
The part of income not spent is________.
Write answers in ‘one’ or ‘two’ paras each :
Explain the concept of saving function.
Write short note on:
Paradox of value
Give reason or explain the following statement
Demand for necessary goods is inelastic.
Answer the following question.
State the objective factors determining consumption function.
Answer the following question.
What is meant by autonomous consumption? Explain with the help of a diagram.
The consumption function of an economy is : C = 40 + 0.8 Y (amount in ₹ crores). Determine that level of income where the average propensity to consume will be one.
Answer the following question.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
If in an economy :
Change in initial Investment (∆I) = ₹ 700 crores
Marginal Propensity to Save (MPS) = 0.2
(a) Investment Multiplier (k)
(b) Change in final income (∆Y)
In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ____________.
What will be APC when APS = 0?
The relation between APC and MPC in Keynes Psychological consumption function is ______.
APC + APS = ?
Which of the following is correct?
Calculate Change in Income (ΔY) for a hypothetical economy. Given that:
- Marginal Propensity to Consume (MPC) = 0.8, and
- Change in Investment (ΔI) = Rs. 1,000 crores
A firm is able to sell any quantity of a good at a given price. The firm's Marginal Revenue will be ______
MPC = 1 − MPS. It is ______
Marginal Propensity to Save is equal to ______
Which of the following points are related to The sum of MPC and MPS is always equal to autonomous investments?
If MPC is 0.9, what is the value of the multiplier? How much investment is needed to increase national income by Rs 5,000 Crores
What is "MPS" or the 'marginal propensity' to save?
What is saving per Income called?
If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______
If MPS = 0, the value of multiplier will be ______
When we add up utility derived from consumption of all the units of the commodities, we get:
Average Propensity to Consume is equal to:
Which of the following statements is not correct?
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be:
Income rises from ₹50,000 to ₹60,000, consumption increases from ₹40,000 to ₹48,000. In this situation, what will be the value of Marginal Propensity to Consume (MPC)?
Identify the correctly matched pair from Column A to column B:
| Column A | Column B |
| (1) MPC = 0 | (a) K > 1 |
| (2) MPC = 1 | (b) K = Infinity |
| (3) MPC < 1 | (c) K = 0 |
| (4) MPC > MPS | (d) K < 1 |
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
In an economy 75 percent of the increase in income is spent on consumption. Investment increased by ₹ 1,000 crore.
Calculate the total increase in income on the basis of given information.
'Consumption function curve of an involuntary unemployed workers start from some positive level on Y-axis even at zero level of Income'. Justify the given statement.
Assertion (A): At the break-even level of income, the value of Average Propensity to Consume (APC) is zero.
Reason (R): Sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one.
How is APS obtained from the APC?
