Suppose Cx measures an economys personal consumption expendi

Suppose C(x) measures an economy\'s personal consumption expenditure and x the personal income, both in billions of dollars. Then the following function measures the economy\'s savings corresponding to an income of x billion dollars.
S(x) = x - C(x) (Income minus consumption)
The quantity dS/dx below is called the marginal propensity to save

dS/dx= 1-dC/dx
For the following consumption function, find the marginal propensity to save.
C(x) = 0.692x + 97.5
?? billion per billion dollars

Solution

dS/dx= 1-dC/dx C(x) = 0.692x + 97.5 Thus, dS/dx = 1 - 0.692 = 0.308
Suppose C(x) measures an economy\'s personal consumption expenditure and x the personal income, both in billions of dollars. Then the following function measure

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