# Thread: Who can help me solve this consumption function?

1. ## Who can help me solve this consumption function?

Suppose thata country's economic consumption function is given by

C = (10√I + 0.7√I^3 - 0.2I) / (√I)

where C and I are expressed in billion dollars.

a. Find the marginal propensity to save when income is 25 billion dollars.
b. determine the relative rate of change of C with respect to I when income is 25 billion dollars.

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Thanks guys!

2. not being an economist it would seem the amount saved is

S = I - C ?

in which case the marginal propensity to save is ds/dI = 1 - dC/dI ?

Simplify C

C = 10 + .7 I -.2 sqrt(I)

so dC/dI should be fairly simple

But then again I am not an economist or for that matter never really studied the subject--

3. I don't know exaclt, any other hint?

4. Originally Posted by robertocusato
Suppose thata country's economic consumption function is given by

C = (10√I + 0.7√I^3 - 0.2I) / (√I)

where C and I are expressed in billion dollars.

a. Find the marginal propensity to save when income is 25 billion dollars.
b. determine the relative rate of change of C with respect to I when income is 25 billion dollars.

--------------------------

Thanks guys!