Final answer:
The key building blocks of the neoclassical consumption model are disposable income, wealth, and expected future income. These factors influence an individual's consumption and savings decisions.
Step-by-step explanation:
The key building blocks of the neoclassical consumption model in economics are disposable income, wealth, and expected future income. Disposable income refers to the income left after taxes, while wealth is the accumulated value of assets. Expected future income is the income that an individual anticipates earning in the future.
These building blocks influence an individual's decision on how much to consume and save. According to the neoclassical consumption model, individuals base their consumption choices on their current disposable income, expected future income, and the amount of wealth they possess.
For example, if an individual's disposable income increases, they may choose to consume more in the present. Similarly, if they anticipate higher future income or have a significant amount of wealth, they may also choose to consume more. Conversely, if any of these building blocks decrease, the individual may choose to consume less and save more for future needs.