Respuesta :
Disposable income = consumption + savings
$35,000 = consumption + $16,100 (which is .46% of the income for savings)
then we need to subtract $16,100 from both sides which leaves us with
$35,000 - $16,100 = $18,900
Consumption = $18,900
$35,000 = consumption + $16,100 (which is .46% of the income for savings)
then we need to subtract $16,100 from both sides which leaves us with
$35,000 - $16,100 = $18,900
Consumption = $18,900
The consumption is $18,900 when the income is $35,000, and the average propensity to save is 0.46.
Further Explanation:
The average propensity to save:
Average propensity to save refers to a ratio that shows how much amount of money a person saves from his income. As the average propensity to save is more, the average tendency to consume isless. There is an indirect relationship between the average propensity to save with the average propensity to consume. As the person spends more, the savings will be less.
Consumption:
Consumptionrefers to the amount of income spends for a particular period of time. The consumption amount can be computed by subtracting savings from the income amount. The consumption can also be computed by different methods in which the amount of income multiplied by the average propensity to consumption.
Compute the consumption:
Consumption = Total income × Average propensity to consume
= $35,000 × 0.54
= $18,900
Working note 1:
Compute the average propensity to consume:
Average propensity to consume = 1- average propensity to consume
= 1 – 0.46
= 0.54
Learn more:
1. Learn more about net income
https://brainly.com/question/10955397
2. Learn more about consumer influence
https://brainly.com/question/5906552
3. Learn more about the savings account
https://brainly.com/question/2652429
Answer details:
Grade: Middle School
Subject: Economics
Chapter: Saving and consumption
Keywords:income, $35,000, average propensity to save, average propensity to consume, consumption, saves, indirect relationship, average propensity to save.
