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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

How is autonomous consumption different from consumption?

To determine

Autonomous consumption and consumption.

Explanation

Consumption is the purchase of the goods and services with the income of a consumer. There are two different types of consumption and they are autonomous consumption and consumption. The autonomous consumption is the consumption of the individual even when the income of the individual is zero or negative. Thus, it is the consumption of the individual when there is no income at all.

The autonomous consumption is an important component of the overall consumption function of the individual. Thus, the overall consumption function can be written as follows:

C=C0+(MPC×Y

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