Consumption Expenditure - Meaning, Table and Graph

Transcript

What is Consumption Expenditure? It is total expenditure of households on purchasing goods and Services Note This Expenditure increase with increase in Income Income (Y) Consumption Expenditure (C) 0 10000 20000 30000 40000 50000 60000 4000 12000 20000 28000 36000 44000 52000 1. Even at 0 level of income, there is some minimum expenditure. This is called Autonomous Consumption Expenditure However, amount of increase is less than increase in Income Example (Income increase by 10000,but Consumption Expenditure increase by 8000) Graph of Consumption Curve Income (Y) Consumption Expenditure (C) 4000 12000 20000 28000 36000 44000 52000 Steps On X Axis, We represent Income On Y Axis, We Represent Consumption Expenditure It can be seen that Consumption Curve (C) is Positively Sloping (It increases with increase in income) Also Consumption curve Starts from Point P and Not Origin OS Represents Autonomous Consumption Expenditure (minimum level of expenditure even at 0 level of income)