Five years ago,Joshua spent 28 percent of his $45,000 yearly income on his bachelor apartment.Today,Joshua is earning $60,000 annually.According to Engel's laws,the percentage of income he will spend on his new apartment will be:
A)more than 70 percent.
B)the same as it was back then, about 28 percent.
C)about 50 percent.
D)less than 10 percent.

Question

Quizplus · Accepted Answer

Engel's law states that as the income increases, the percentage of income spent on food, clothing, and housing decreases. Therefore, since Joshua's income has increased, it is likely that the percentage he spends on his new apartment will be less than the 28% he spent on his bachelor apartment five years ago. However, without any information on Joshua's current expenses, it is reasonable to assume that the percentage will be relatively similar to the percentage he spent on his previous apartment. Therefore, the best choice is B, the same as it was back then, about 28 percent.

Five Years Ago,Joshua Spent 28 Percent of His $45,000 Yearly