The consumption schedule in the above diagram indicates that:
A)consumers will maximize their satisfaction where the consumption schedule and 45° line intersect.
B)up to a point consumption exceeds income, but then falls below income.
C)the MPC falls as income increases.
D)households consume as much as they earn.
Answer:B
The consumption schedule in the above diagram indicates that:
A)consumers will maximize their satisfaction where the consumption schedule and 45° line intersect. B)up to a point consumption exceeds income, but then falls below income. C)the MPC falls as income increases. D)households consume as much as they earn.