Question

When consumption function lies below 45°line, APS will be positive true or false

Answer 1

Answer:

true, because the point at which the consumption curve intersect the 45 degree line is break even point which to the point where the income = consumption or saving = 0. therefore ,APS is zero as Aps = saving / income..

Answer 2

Concept: Consumption function is the relation between various factors and the consumer spending.

Given: When consumption function lies below 45°line, APS will be positive.

Find: State true or false.

Solution: When consumption function lies below 45°line, then APS will be negative. APS is less than or equal to 1. So that it can be negative if income is zero.

Final answer: False.

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