Explore IDNLearn.com's extensive Q&A database and find the answers you're looking for. Find reliable solutions to your questions quickly and easily with help from our experienced experts.
Sagot :
Certainly! Let's complete the table step-by-step and then address the calculation of MPC and its interpretation.
Let's fill in the missing values in the table one by one.
1. Identify the given data:
- [tex]\( MPC = 0.97 \)[/tex]
- [tex]\( MPS = 0.03 \)[/tex] (Given directly)
- Relations: [tex]\( S = Y - C \)[/tex], [tex]\( APC = \frac{C}{Y} \)[/tex], [tex]\( APS = \frac{S}{Y} \)[/tex]
We start filling the table with the given [tex]\( MPS \)[/tex] and [tex]\( MPC \)[/tex].
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|} \hline Y & C & S & tPC & APS & MPC & MPS \\ \hline 25 & 25 - S & S & \frac{C}{25} & \frac{S}{25} & 0.97 & 0.03 \\ \hline 50 & 50 - S & 20 & \frac{C}{50} & \frac{20}{50} & 0.97 & 0.03 \\ \hline 75 & 75 - S & 40 & \frac{C}{75} & \frac{40}{75} & 0.97 & 0.03 \\ \hline 100 & 100 - S & 60 & \frac{C}{100} & \frac{60}{100} & 0.97 & 0.03 \\ \hline 125 & 125 - S & 80 & \frac{C}{125} & \frac{80}{125} & 0.97 & 0.03 \\ \hline 150 & 150 - S & 100 & \frac{C}{150} & \frac{100}{150} & 0.97 & 0.03 \\ \hline \end{array} \][/tex]
Next, let's calculate the values of [tex]\( C \)[/tex] considering [tex]\( S \)[/tex]:
1. For [tex]\( Y = 50 \)[/tex]:
[tex]\[ S = 20 \][/tex]
[tex]\[ C = Y - S = 50 - 20 = 30 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{30}{50} = 0.6 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{20}{50} = 0.4 \][/tex]
2. For [tex]\( Y = 75 \)[/tex]:
[tex]\[ S = 40 \][/tex]
[tex]\[ C = Y - S = 75 - 40 = 35 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{35}{75} \approx 0.47 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{40}{75} \approx 0.53 \][/tex]
3. For [tex]\( Y = 100 \)[/tex]:
[tex]\[ S = 60 \][/tex]
[tex]\[ C = Y - S = 100 - 60 = 40 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{40}{100} = 0.4 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{60}{100} = 0.6 \][/tex]
4. For [tex]\( Y = 125 \)[/tex]:
[tex]\[ S = 80 \][/tex]
[tex]\[ C = Y - S = 125 - 80 = 45 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{45}{125} = 0.36 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{80}{125} = 0.64 \][/tex]
5. For [tex]\( Y = 150 \)[/tex]:
[tex]\[ S = 100 \][/tex]
[tex]\[ C = Y - S = 150 - 100 = 50 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{50}{150} \approx 0.33 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{100}{150} \approx 0.67 \][/tex]
Now, let's fill in the table:
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|} \hline Y & C & S & APC & APS & MPC & MPS \\ \hline 25 & 0 & 25 & 0 & 1 & 0.97 & 0.03 \\ \hline 50 & 30 & 20 & 0.6 & 0.4 & 0.97 & 0.03 \\ \hline 75 & 35 & 40 & 0.47 & 0.53 & 0.97 & 0.03 \\ \hline 100 & 40 & 60 & 0.4 & 0.6 & 0.97 & 0.03 \\ \hline 125 & 45 & 80 & 0.36 & 0.64 & 0.97 & 0.03 \\ \hline 150 & 50 & 100 & 0.33 & 0.67 & 0.97 & 0.03 \\ \hline \end{array} \][/tex]
## Q#3b. Given that the MPS of a typical consumer is 0.03, calculate his/her MPC and give its economic interpretation.
Since the Marginal Propensity to Save (MPS) is 0.03, we calculate the Marginal Propensity to Consume (MPC) using the relationship:
[tex]\[ MPC = 1 - MPS \][/tex]
Thus,
[tex]\[ MPC = 1 - 0.03 = 0.97 \][/tex]
### Economic Interpretation:
The Marginal Propensity to Consume (MPC) is 0.97. This means that for every additional dollar of income that a typical consumer receives, they spend 97 cents on consumption and save only 3 cents. Essentially, this high MPC indicates that consumers are more likely to spend the money they earn rather than save it. This behavior can be expected in an economy that is consumer-driven, where people are focusing more on consumption than savings.
Let's fill in the missing values in the table one by one.
1. Identify the given data:
- [tex]\( MPC = 0.97 \)[/tex]
- [tex]\( MPS = 0.03 \)[/tex] (Given directly)
- Relations: [tex]\( S = Y - C \)[/tex], [tex]\( APC = \frac{C}{Y} \)[/tex], [tex]\( APS = \frac{S}{Y} \)[/tex]
We start filling the table with the given [tex]\( MPS \)[/tex] and [tex]\( MPC \)[/tex].
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|} \hline Y & C & S & tPC & APS & MPC & MPS \\ \hline 25 & 25 - S & S & \frac{C}{25} & \frac{S}{25} & 0.97 & 0.03 \\ \hline 50 & 50 - S & 20 & \frac{C}{50} & \frac{20}{50} & 0.97 & 0.03 \\ \hline 75 & 75 - S & 40 & \frac{C}{75} & \frac{40}{75} & 0.97 & 0.03 \\ \hline 100 & 100 - S & 60 & \frac{C}{100} & \frac{60}{100} & 0.97 & 0.03 \\ \hline 125 & 125 - S & 80 & \frac{C}{125} & \frac{80}{125} & 0.97 & 0.03 \\ \hline 150 & 150 - S & 100 & \frac{C}{150} & \frac{100}{150} & 0.97 & 0.03 \\ \hline \end{array} \][/tex]
Next, let's calculate the values of [tex]\( C \)[/tex] considering [tex]\( S \)[/tex]:
1. For [tex]\( Y = 50 \)[/tex]:
[tex]\[ S = 20 \][/tex]
[tex]\[ C = Y - S = 50 - 20 = 30 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{30}{50} = 0.6 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{20}{50} = 0.4 \][/tex]
2. For [tex]\( Y = 75 \)[/tex]:
[tex]\[ S = 40 \][/tex]
[tex]\[ C = Y - S = 75 - 40 = 35 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{35}{75} \approx 0.47 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{40}{75} \approx 0.53 \][/tex]
3. For [tex]\( Y = 100 \)[/tex]:
[tex]\[ S = 60 \][/tex]
[tex]\[ C = Y - S = 100 - 60 = 40 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{40}{100} = 0.4 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{60}{100} = 0.6 \][/tex]
4. For [tex]\( Y = 125 \)[/tex]:
[tex]\[ S = 80 \][/tex]
[tex]\[ C = Y - S = 125 - 80 = 45 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{45}{125} = 0.36 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{80}{125} = 0.64 \][/tex]
5. For [tex]\( Y = 150 \)[/tex]:
[tex]\[ S = 100 \][/tex]
[tex]\[ C = Y - S = 150 - 100 = 50 \][/tex]
[tex]\[ APC = \frac{C}{Y} = \frac{50}{150} \approx 0.33 \][/tex]
[tex]\[ APS = \frac{S}{Y} = \frac{100}{150} \approx 0.67 \][/tex]
Now, let's fill in the table:
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|} \hline Y & C & S & APC & APS & MPC & MPS \\ \hline 25 & 0 & 25 & 0 & 1 & 0.97 & 0.03 \\ \hline 50 & 30 & 20 & 0.6 & 0.4 & 0.97 & 0.03 \\ \hline 75 & 35 & 40 & 0.47 & 0.53 & 0.97 & 0.03 \\ \hline 100 & 40 & 60 & 0.4 & 0.6 & 0.97 & 0.03 \\ \hline 125 & 45 & 80 & 0.36 & 0.64 & 0.97 & 0.03 \\ \hline 150 & 50 & 100 & 0.33 & 0.67 & 0.97 & 0.03 \\ \hline \end{array} \][/tex]
## Q#3b. Given that the MPS of a typical consumer is 0.03, calculate his/her MPC and give its economic interpretation.
Since the Marginal Propensity to Save (MPS) is 0.03, we calculate the Marginal Propensity to Consume (MPC) using the relationship:
[tex]\[ MPC = 1 - MPS \][/tex]
Thus,
[tex]\[ MPC = 1 - 0.03 = 0.97 \][/tex]
### Economic Interpretation:
The Marginal Propensity to Consume (MPC) is 0.97. This means that for every additional dollar of income that a typical consumer receives, they spend 97 cents on consumption and save only 3 cents. Essentially, this high MPC indicates that consumers are more likely to spend the money they earn rather than save it. This behavior can be expected in an economy that is consumer-driven, where people are focusing more on consumption than savings.
Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. Thank you for choosing IDNLearn.com. We’re dedicated to providing clear answers, so visit us again for more solutions.
