Which of the following services has a particularly low income elasticity?
A) health care
B) travel
C) entertainment
D) transportation
E) a day at the spa

Question

Quizplus · Accepted Answer

Health care is considered a necessity and people will generally continue to spend money on it regardless of changes in their income. Therefore, health care has a low income elasticity. Travel, entertainment, transportation, and spa services are more likely to have a higher income elasticity as they are considered luxury or optional expenses that people may cut back on when their income decreases.

Which of the Following Services Has a Particularly Low Income