CBSE 2017 Class 12 Economics Outside Delhi Set-1
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Question : 18 of 18
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Given a consumption curve, outline the steps required to be taken in deriving a saving curve from it. Use diagram.
Solution:
In the above diagram :
Consumption function
degree line showing income drawn from the origin .
Breakeven point where consumption = income, i.e, a point where there is no saving.
Following are the steps used in drawing saving curve from consumption function :
(i) Take a point on consumption curve and from it draw a perpendicular on -axis intersecting it on point .
(ii) Take OS on -axis of lower part as equal to . This gives point from where saving curve will start.
(iii)Join points and and extend the straight line upward and thus we get saving curve .
In this way, saving curve is diagrammatically drawn from consumption curve.
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