Question

From the given table, identify that level of income, where Average Propensity to Save (APS) becomes Zero. (Choose the correct alternative.) 

• A. 50
• B. 100
• C. 200
• D. 0

Hint:

APS is calculated as \( {APS} = \frac{{Savings}}{{Income}} \). It is zero when Savings = 0.

Answer 1

The Correct Option is B

APS becomes zero when savings are zero. Savings are calculated as: 
\[ {Savings} = {Income} - {Consumption}. \] 

From the table: At an income of rupees100, consumption is also rupees 100, resulting in zero savings. Therefore, APS becomes zero at rupees 100.