Engel's Law claims that
A) the percentage increase in quantity demanded for food is less than the percentage increase in income
B) food is an inferior good (as economists define inferior good, of course)
C) the demand for food is income elastic
D) the income elasticity for food is negative
E) consumers' demand for food does not increase when the price of food falls

Question

Quizplus · Accepted Answer

Engel's Law states that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises. This implies that the percentage increase in quantity demanded for food is less than the percentage increase in income, making option A correct.

Engel's Law Claims That