Q IN-CLASS WORKSHEET 1 This question explores the calculation of the marginal propensity to consume and the marginal propensity to save. You will be provided some imperfect income and spending data for five different individuals and asked to identify their marginal propensities to consume and save. Task 1: Jenni’s disposable income is $25,000. She chooses to spend $22,000 of her disposable income. What is Jenni’s marginal propensity to consume (mpc)? What is Jenni’s marginal propensity to save (mps)? Task 2: Dave’s disposable income is $120,000. He chooses to spend $35,000 of his disposable income. What is Dave’s marginal propensity to consume (mpc)? What is Dave’s marginal propensity to save (mps)? Task 3: Tom’s disposable income is $40,000. He chooses to spend $39,000 of his disposable income. What is Tom’s marginal propensity to consume (mpc)? What is Thomas’ marginal propensity to save (mps)? Task 4: Elena’s disposable income is $65,000. She chooses to spend $50,000 of her disposable income. What is Elena’s marginal propensity to consume (mpc)? What is Elena’s marginal propensity to save (mps)? Task 5: Ricardo’s disposable income is $95,000. He chooses to spend $70,000 of his disposable income. What is Ricardo’s marginal propensity to consume (mpc)? What is Ricardo’s marginal propensity to save (mps)? AGGREGATE EXPENDITURE MODEL IN-CLASS WORKSHEET 3 This question explores the consumption schedule. You will be provided the equation for a consumption schedule and use that consumption schedule to identify autonomous consumption, the marginal propensity to consume, and the marginal propensity to save. The consumption schedule in the Republic of Butters is given as: C = 2 + ¾Y where C is the total consumption and Y is the total income in the Republic of Butters. Task 1: In the space below, sketch out the consumption schedule for the Republic of Butters. Remember to place “Real GDP” on the horizontal axis and “Consumption” on the vertical axis. Hint: This consumption schedule curve is a straight line. Task 2: What is the value of autonomous consumption in the Republic of Butters? Task 3: What is marginal propensity to consume (mpc) in the Republic of Butters? Task 4: What is marginal propensity to save (mps) in the Republic of Butters? Name:_________________________________ Course:___________________ Section:___________