Explanation Given information: The consumption function of economy is, C ( x ) = 0.712 x + 95.05 Where, C ( x ) is personal consumption expenditure and x is the personal income. S ( x ) = x − C ( x ) The rate of change of consumption with respect of income ( d S ( x ) d x ) , is called the marginal propensity to save. Calculation: The saving function is, S ( x ) = x − C ( x ) Substitute 0.712 x + 95.05 for C ( x ) in the above formula. S ( x ) = x − C ( x ) = x − 0.712 x − 95.05 = 0.288 x − 95.05 The marginal propensity to save is calculated as ( d S ( x ) d x )

APPLIED CALCULUS FOR MGRL, LIFE, SOC SCI

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ISBN: 9780357465400

Author: Tan

Publisher: CENGAGE L

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Chapter 3.4, Problem 21E

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Marginal propensity to save.

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Chapter 3.4, Problem 20E

Chapter 3.4, Problem 22E

Chapter 3 Solutions

APPLIED CALCULUS FOR MGRL, LIFE, SOC SCI

Ch. 3.1 - State the following rules of differentiation in...Ch. 3.1 - Prob. 2CQ Ch. 3.1 - Prob. 3CQ Ch. 3.1 - Prob. 4CQ Ch. 3.1 - Prob. 1E Ch. 3.1 - Prob. 2E Ch. 3.1 - Prob. 3E Ch. 3.1 - Prob. 4E Ch. 3.1 - Prob. 5E Ch. 3.1 - Prob. 6E

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Marginal propensity to save.

Solution Summary: The author calculates the marginal propensity to save by subtracting 0.712x+95.05 for C(x) in the above equation.

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