Autonomous consumption is assumed to be at zero level of income. It is a concept in economics that refers to the minimum level of consumption that individuals or households engage in, regardless of their income levels.

Explanation:
Autonomous consumption is also known as the level of consumption that is independent of changes in income levels. This means that even if the income of an individual or household were to increase or decrease, their level of autonomous consumption would remain the same. Autonomous consumption includes the basic necessities of life, such as food, clothing, and shelter.

Autonomous consumption is generally assumed to be zero at the zero level of income. This implies that when an individual or household has no income, they will consume nothing or only the bare minimum required for survival. As income increases, so does consumption. However, the increase in consumption is not proportional to the increase in income because individuals and households tend to save a portion of their income.

Autonomous consumption plays an important role in determining the level of aggregate demand in an economy. It is one of the components of the aggregate demand function, which is the total level of spending in an economy. The other components of aggregate demand include investment, government spending, and net exports.

Conclusion:
In conclusion, autonomous consumption is the minimum level of consumption that individuals or households engage in, regardless of their income levels. It is generally assumed to be zero at the zero level of income. Autonomous consumption plays an important role in determining the level of aggregate demand in an economy and is a key concept in macroeconomics.

Autonomous Consumption and Its Assumptions

Autonomous consumption refers to the minimum level of spending or consumption that an individual or a household has to incur irrespective of their income level. It is the basic level of expenditure that is necessary for survival and is not dependent on the level of income. It is assumed that autonomous consumption is at zero levels of income.

Reasons for Autonomous Consumption at Zero Level of Income

There are several reasons for autonomous consumption to be assumed at zero levels of income, which are as follows:

1. Basic Needs: Autonomous consumption is based on the minimum level of expenditure required for basic necessities like food, shelter, and clothing. These essential needs are considered to be met even at zero levels of income.

2. Savings: At lower levels of income, individuals tend to save more and spend less on non-essential items. This means that the level of autonomous consumption is also lower.

3. Government Support: In many countries, the government provides basic support to individuals and households with low or no income through various welfare programs. This support helps meet basic needs, thereby reducing autonomous consumption at zero income levels.

4. Borrowing: In some cases, individuals may resort to borrowing to meet their basic needs. However, this is not a sustainable solution, and over time, the level of autonomous consumption will increase.

Conclusion

In conclusion, autonomous consumption is the minimum level of expenditure that an individual or a household has to incur irrespective of their income level. It is assumed to be at zero levels of income, as basic needs are considered to be met, and individuals tend to save more and spend less on non-essential items. Moreover, government support and borrowing are also factors that influence the level of autonomous consumption.