To accurately respond to your question, I would need to see the figure you're referring to. However, I can provide some general insights about consumption schedules and the 45° line.
-
Consumers will maximize their satisfaction where the consumption schedule and 45° line intersect: This statement is typically true. The point where the consumption schedule intersects the 45-degree line indicates that consumption equals income, and this is often where consumer satisfaction is maximized.
-
Up to a point, consumption exceeds income but then falls below income: This situation can happen in real-world scenarios if consumers are borrowing or using savings to finance consumption, and it may be depicted in some models. However, this isn't a standard interpretation of the consumption schedule.
-
The MPC falls as income increases: The marginal propensity to consume (MPC) can indeed decrease as income increases, but this isn't universally true and may depend on the specific economic context.
-
Households consume as much as they earn: This is reflected at the point where the consumption schedule intersects the 45-degree line, meaning consumption is equal to income at that level.
Given these insights, the option that is most likely correct (assuming the standard model of consumption) is: "consumers will maximize their satisfaction where the consumption schedule and 45° line intersect."
If you can provide the figure or more context, I could help you make a more precise choice.