The figure given below shows the consumption function of a household.
Figure 9.2

-In Figure 9.2, an increase in autonomous consumption would be illustrated by:
A) moving from point A to point D.
B) moving from point A to point B.
C) shifting the whole consumption function upward.
D) shifting the whole consumption function downward.
E) moving from point C to point B.

Question

The figure given below shows the consumption function of a household.
Figure 9.2
 
-In Figure 9.2, an increase in autonomous consumption would be illustrated by:
A) moving from point A to point D. 
B) moving from point A to point B. 
C) shifting the whole consumption function upward. 
D) shifting the whole consumption function downward. 
E) moving from point C to point B.

Quizplus · Accepted Answer

An increase in autonomous consumption would shift the whole consumption function upward, as it represents an increase in consumption at every level of income. This is depicted by moving the entire consumption function to the left, such that the intercept with the Y-axis is higher, as shown in the figure below:

Figure 9.2a
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The Figure Given Below Shows the Consumption Function of a Household