For a good such as food,the income elasticity is likely
A) negative.
B) equal to zero.
C) positive and less than one.
D) positive and greater than one.
E) undefined because people always buy the same amount of food.

Question

Quizplus · Accepted Answer

The income elasticity for food is typically positive and less than one because as income increases, people do spend more on food, but the increase in spending is proportionally less than the increase in income. Food is a necessity, and while consumption may increase with higher income, it does not increase at the same rate as income, hence the elasticity is positive but less than one.

For a Good Such as Food,the Income Elasticity Is Likely