Question

From the given table, identify that level of income, where Average Propensity to Save (APS) becomes zero: 
 

• A. 50
• B. 100
• C. 200
• D. 0

Hint:

When consumption equals income, APS becomes zero, indicating no savings.

Answer 1

The Correct Option is B

The Average Propensity to Save (APS) is calculated as: \[ {APS} = \frac{{Savings}}{{Income}} = \frac{{Income} - {Consumption}}{{Income}} \] At Income = 100 crore, consumption is also 100 crore. Hence, savings will be zero: \[ {Savings} = {Income} - {Consumption} = 100 - 100 = 0 \] Thus, APS = 0 when income is 100 crore. 
Conclusion: The APS becomes zero at 100 crore income because savings equal zero when consumption is equal to income.