When the consumption schedule is plotted on a graph:
A) Consumption is on the horizontal axis and saving is on the vertical axis
B) Consumption is on the vertical axis and saving is on the horizontal axis
C) Consumption is on the horizontal axis and disposable income is on the vertical axis
D) Consumption is on the vertical axis and disposable income is on the horizontal axis

Question

Quizplus · Accepted Answer

The consumption schedule is typically plotted with consumption on the vertical axis and disposable income on the horizontal axis. This is because consumption is a dependent variable that varies depending on the level of disposable income. As disposable income increases, consumption typically increases as well. Therefore, plotting consumption on the vertical axis allows for a clear representation of the relationship between disposable income and consumption.

When the Consumption Schedule Is Plotted on a Graph