1. Explain why an upward shift of the consumption schedule typically involves an equal downshift of the saving schedule. What is the exception to this relationship?
2. KEY QUESTION Complete the following table:
a. Show the consumption and saving schedules graphically.
b. Find the break-even level of income. Explain how it is possible for households to dissave at very low income levels.
c. If the proportion of total income consumed (APC) decreases and the proportion saved (APS) increases as income rises, explain both verbally and graphically how the MPC and MPS can be constant at various levels of income.
