Apc (1 Viewer)

[tim price]

can someone please explain this to me, it's been mentioned several times in my class but i still don't fully understand what it is or the equation for it. any help would be appreciated.

 

[tWiStEdD]

ask me again... what do you mean by APC? there are plenty of anagrams in eco.... make it clear as to what it is you're asking about.

 

[Rafy]

he means the "Average propensity to consume"

i.e the amount of income an average family spends/consumes on g+s

equation is something like Consumption/Income (From memory)

 

[tWiStEdD]

yeah. that's the one. we dont call it APC, sorry
yeah. it sounds good to me.
you shouldnt have to worry about the formula, you'll never get a question on it. you're more likely to get the APC and then have to work out shit from there.

 

[insert-username]

Average Propensity to Consume = Amount Consumed for Certain Income Level/That Certain Income Level.

Basically, it's the percentage of your total income that you spend on goods and services (i.e. don't save). As a general rule, for low income earners, the APC is high, and it steadily decreases as income increases. That's what I remember, anyway...


I_F

 

[tWiStEdD]

expressed as a decimal, though. i.e. 80% APC is 0.8

 

[Rafy]

Is this in the HSC course? I remember doing APC in YEar 11, but never anything on it this year....

 

[sunjet]

Yes..

APC = average propensity to consume, ie the income that you recieve that is spent.
MPC = marginal propensity to consume, ie the amount of every extra dollar you consume