FIGURE 21-1
-Refer to Figure 21-1. If disposable income is equal to Y3, desired consumption expenditure is equal to the vertical distance
A) Y3E.
B) Y3D.
C) Y3F.
D) Y3.
E) DE.

Question

FIGURE 21-1
-Refer to Figure 21-1. If disposable income is equal to Y3, desired consumption expenditure is equal to the vertical distance
A) Y3E. 
B) Y3D. 
C) Y3F. 
D) Y3. 
E) DE.

Quizplus · Accepted Answer

Desired consumption expenditure is represented by the consumption function (C) in the graph. At disposable income Y3, the desired consumption expenditure is equal to Y3D, which is the vertical distance from the consumption function to the disposable income axis.

FIGURE 21-1 -Refer to Figure 21-1. If Disposable Income Is Equal to Equal