It is estimated that a 10 percent decline in income will reduce cigarette smoking by 1.4 percent. From this information one can conclude that cigarettes are most likely:
A) a luxury.
B) a necessity.
C) an inferior good.
D) a large portion of one's budget.

Question

Quizplus · Accepted Answer

Cigarettes are likely a necessity because the percentage decrease in consumption (1.4%) is smaller than the percentage decrease in income (10%), indicating that people continue to purchase them despite lower income.

It Is Estimated That a 10 Percent Decline in Income