The Income Elasticity of Demand for Food Is Roughly 1

question 381

Multiple Choice

The income elasticity of demand for food is roughly 1. Suppose a consumer's monthly income is $2,000, of which 20 percent is spent on food. If the income of this consumer doubles, the amount she'll spend on food will be

• A)$400 per month.
• B)$500 per month.
• C)$800 per month.
• D)$1,000 per month.

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