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Math Help - Who can help me solve this consumption function?

  1. #1
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    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.

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

    Thanks guys!
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  2. #2
    MHF Contributor Calculus26's Avatar
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    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--
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  3. #3
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    I don't know exaclt, any other hint?
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  4. #4
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    Quote Originally Posted by robertocusato View Post
    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!
    Read these threads and learn something from them:

    http://www.mathhelpforum.com/math-he...y-consume.html

    http://www.mathhelpforum.com/math-he...-function.html
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