structural:scholar_edition
Background

Here Δ C = 50 {\displaystyle \Delta C=50}; Δ Y = 60 {\displaystyle \Delta Y=60} Therefore, M P C = Δ C / Δ Y = 50 / 60 = 0.83 {\displaystyle {\mathit {MPC}}=\Delta C/\Delta Y=50/60=0.83} or 83%.For example, suppose you receive a bonus with your paycheck, and it's $500 on top of your normal annual earnings. You suddenly have $500 more in income than you did before. If you decide to spend $400 of this marginal increase in income on a new business suit, your marginal propensity to consume will be 0.8 ($ 400 / $ 500 {\displaystyle \$400/\$500}).