500 475 450 Consumption schedule 425 Saving $5 billion 400 375 Dissaving $5 billion 45 370 390 410 430 450 470 490 S10 530 550 Disposable income (billions of dollars) (a) Consumption schedule Consumption (billions of dollars)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Based on the above graph, which of the following is wrong?
Select one:
a. Saving is inversely (negatively) related to disposable income.
b. The marginal propensity to consume is constant at all levels of income and it is equal to the slope of the consumption schedule.
c. The marginal propensity to save rises as disposable income rises.
d. When consumption equals disposable income saving must be zero. 
500
475
450
Consumption
schedule
425
Saving $5 billion
400
375
Dissaving $5 billion
45
370 390 410 430 450 470 490
SI0 530 550
Disposable income (billions of dollars)
(a)
Consumption schedule
Consumption (billions of dollars)
Transcribed Image Text:500 475 450 Consumption schedule 425 Saving $5 billion 400 375 Dissaving $5 billion 45 370 390 410 430 450 470 490 SI0 530 550 Disposable income (billions of dollars) (a) Consumption schedule Consumption (billions of dollars)
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