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Suppose that the marginal propensity to consume is constant 0.5 and break even point (zero saving point) is Tsh. 8000 if income is Tsh. 10000, then by using formula calculate consumption and saving?
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Suppose that the marginal propensity to consume is constant 0.5 and br...

Calculation of Consumption and Saving

Consumption and saving can be calculated using the formula:

C = aY + b
S = Y - C

Where:
- C is consumption
- S is saving
- a is the marginal propensity to consume (0.5 in this case)
- Y is income (Tsh. 10000 in this case)
- b is the break-even point (Tsh. 8000 in this case)

Calculation of Consumption

Given that the marginal propensity to consume is 0.5 and income is Tsh. 10000, we can calculate consumption as follows:

C = 0.5 * 10000 + 8000
C = 5000 + 8000
C = Tsh. 13000

Therefore, consumption is Tsh. 13000.

Calculation of Saving

Saving can be calculated by subtracting consumption from income. Using the values we have:

S = 10000 - 13000
S = -3000

Since saving cannot be negative, this implies that there is no saving at an income level of Tsh. 10000. This means that all income is being consumed, and there is no saving at this income level.

In conclusion, consumption at an income of Tsh. 10000 is Tsh. 13000, and saving is zero. This indicates that individuals are spending all of their income at this income level.
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Suppose that the marginal propensity to consume is constant 0.5 and break even point (zero saving point) is Tsh. 8000 if income is Tsh. 10000, then by using formula calculate consumption and saving?
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Suppose that the marginal propensity to consume is constant 0.5 and break even point (zero saving point) is Tsh. 8000 if income is Tsh. 10000, then by using formula calculate consumption and saving? for Economics 2024 is part of Economics preparation. The Question and answers have been prepared according to the Economics exam syllabus. Information about Suppose that the marginal propensity to consume is constant 0.5 and break even point (zero saving point) is Tsh. 8000 if income is Tsh. 10000, then by using formula calculate consumption and saving? covers all topics & solutions for Economics 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose that the marginal propensity to consume is constant 0.5 and break even point (zero saving point) is Tsh. 8000 if income is Tsh. 10000, then by using formula calculate consumption and saving?.
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