Engel's law suggests that the demand for food is
A) income inelastic
B) income elastic
C) price inelastic
D) price elastic
E) highly correlated with population size

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 food is a necessity with low income elasticity of demand, making it income inelastic.

Engel's Law Suggests That the Demand for Food Is