Refer to the consumption schedule shown in the graph. The break-even level of income would be at income level
A) 0.
B) 1.
C) 2.
D) 3.

Question

Refer to the consumption schedule shown in the graph. The break-even level of income would be at income level
A) 0. 
B) 1. 
C) 2. 
D) 3.

Quizplus · Accepted Answer

The break-even level of income is the point at which consumption equals income, which is where the consumption schedule intersects with the 45-degree line. In this case, that intersection occurs at income level 2. Therefore, the correct answer is C.

Refer to the Consumption Schedule Shown in the Graph