Difference between consumption and consumption function?Aacording to me both are same in defenation so experts plz tell me the difference between both?Plz state the example?
Shivang,
Both Consumption and Consumption function are different concepts. Consumption implies utilising economic goods (like money) to fulfill the needs. For example, we all use money to purchase various commodities such as food, clothes, TV, mobile, etc. to satisfy our needs. You must note that in economics, consumption is basically referred to the expenditure incurred only on the purchase of final goods. For example, if you buy wheat for feeding your family and yourself, then this is regarded as consumption. However, if you buy wheat for preparing biscuits that you tend to sell in the market, then this cannot be considered as consumption expenditure.
On the other hand, Consumption function depicts the relationship between consumption expenditure and the level of disposable income.
We would advice you to not to keep on piling your questions, rather, you should keep posting 1 to 2 questions per subject (Accountancy, Economics and Business Studies) on everyday basis. Ideally, you should go through the study material that is available on our website and look for the answers to the questions. This will not only help you to enhance your analytical abilities but also will help you to learn the application of your knowledge. In this manner, you will gain confidence and will help you in evaluating your preparation.
Both Consumption and Consumption function are different concepts. Consumption implies utilising economic goods (like money) to fulfill the needs. For example, we all use money to purchase various commodities such as food, clothes, TV, mobile, etc. to satisfy our needs. You must note that in economics, consumption is basically referred to the expenditure incurred only on the purchase of final goods. For example, if you buy wheat for feeding your family and yourself, then this is regarded as consumption. However, if you buy wheat for preparing biscuits that you tend to sell in the market, then this cannot be considered as consumption expenditure.
On the other hand, Consumption function depicts the relationship between consumption expenditure and the level of disposable income.
We would advice you to not to keep on piling your questions, rather, you should keep posting 1 to 2 questions per subject (Accountancy, Economics and Business Studies) on everyday basis. Ideally, you should go through the study material that is available on our website and look for the answers to the questions. This will not only help you to enhance your analytical abilities but also will help you to learn the application of your knowledge. In this manner, you will gain confidence and will help you in evaluating your preparation.