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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.

For the following consumption function, find the marginal propensity to save.
C(x) = 0.701x + 99.34
$ billion per billion dollars

  • math -

    This is a optimization problem !!

  • math -

    according to your definition ...

    S(x) = x - .701x - 99.34
    then dS(x)/dx = 1 - .701 = .299

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