Figure 11-3

-In Figure 11-3, which line represents the change in the consumption schedule caused by an increase in the personal income tax?
A)C₁ in graph (a)
B)C2 in graph (a)
C)C₁ in graph (b)
D)C2 in graph (b)

Question

Figure 11-3
 
-In Figure 11-3, which line represents the change in the consumption schedule caused by an increase in the personal income tax?
A)C₁ in graph (a) 
B)C2 in graph (a) 
C)C₁ in graph (b) 
D)C2 in graph (b)

Quizplus · Accepted Answer

Graph (b) represents the consumption function after the increase in personal income tax, with C₁ representing the initial consumption schedule and C₂ representing the post-tax consumption schedule. Therefore, the correct answer is C₁ in graph (b).

Figure 11-3 -In Figure 11-3, Which Line Represents the Change in the the Change