The Income Elasticity of Demand for Food Is Roughly 1

question 214

Multiple Choice

The income elasticity of demand for food is roughly 1. 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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Definitions:

Retirement

The act of leaving one's job and ceasing to work, typically due to age or health reasons, often requiring financial planning.