Refer to the above diagram.The APC diminishes as income increases for: A)none of the consumption schedules shown. B)C₃ only. C)C₁, and C₂. D)C₄ only.

Question

Quizplus · Accepted Answer

The APC (average propensity to consume) diminishes as income increases when the consumption schedule has a positive slope. This is true for C₁ and C₂, as they both have positive slopes. However, C₃ and C₄ have negative slopes, so the APC increases as income increases.

Refer to the Above Diagram