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

C₁ and C₂ both exhibit a downward sloping APC, meaning that as income increases, the average propensity to consume decreases. C₃ and C₄ have a constant APC, meaning that income has no effect on the average propensity to consume. Therefore, the correct answer is C.

Refer to the Above Diagram