HomeBristol Quiz 3 Chapter 5 eztomheducationcomhmtpx Expen

Home-Bristol Quiz #3: Chapter 5 : ® ezto.mheducation.com/hm.tpx Expenditures 8000 6000 4000 2000 2000 4000 60008000 Disposable income Saving is negative below a disposable income of 2500 3000

Solution

Correct option: D) 3500
Explanation: For levels of disposable income to the left of the point where consumption intersects the 45-degree line(break even point), saving is negative.
Here in above diagram, break even point is at 3500 disposable income, hence below that savings will be negative.