Which of the following goods is likely to have the highest income elasticity?
A) A designer blouse
B) Tomato soup
C) Hamburger
D) Can of tuna

Question

Quizplus · Accepted Answer

Luxury goods such as designer blouses are typically associated with higher income levels and are often purchased as a status symbol. As people's incomes rise, they are likely to spend a higher percentage of their income on luxury goods like designer blouses, resulting in a high income elasticity of demand for such goods.

Which of the Following Goods Is Likely to Have the Highest