When income is zero, the person will spend $800 a year (either by
borrowing the money or by spending past savings), and for every extra $1
of income the person will increase spending by 80 cents.
Table
This table shows selected values of the person’s income and
consumption.
Annual Income Consumption Reference Letter
$ 0 $ 800 p
2 500 2 800 q
5 000 4 800 r
7 500 6 800 s
10 000 8 800 t