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CBSE 2022 Class 12 Economics Outside Delhi Set 1 (Term 2)

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Question : 3
Total: 19
On the basis of following schedule, answer the given questions:
 Income (in ₹ crores)  Savings (in ₹ crores)
 0  -20
 50  -10
 100  0
 150  30
 200  60

(a) Calculate Marginal Propensity to Save (MPS) at ₹150 crores level of income.
(b) What is the value of Autonomous Consumption?
Solution:  
 (Y) Income (in crores)  (S) Savings (in crores)   ΔS (in crores)   ΔY (in crores)
 0  -20  -  -
 50  -10  −10−(−20)=10  50−0=50
 100  0  0−(−10)=10  100−50=50
 150  30  30−0=30  150−100=50
 200  60  60−30=30  200−150=50
(a) ‌ MPS at ‌150‌=‌
∆S
∆Y
‌=‌
30
50
=0.6
(b) Autonomous consumption (consumption at 0 level of income) Y−S=0−(−20)=20 crores.
OR
MPC‌=75%=0.75
∆I‌=1,000
∆Y‌=?
K‌=‌
1
1−MPC
‌=‌
1
1−0.75
=‌
1
0.25
=4
K‌=‌
∆Y
∆I
4‌=‌
∆Y
1000
4×1000‌=∆Y
₹4,000‌=∆Y
Thus, the increase in income =₹4,000 crores
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