Food and clothing tend to have A. Large income elasticities because they are nec

Question

Food and clothing tend to have A. Large income elasticities because they are necessities B. Small income elasticities because consumers, regardless of their incomes, chose to buy relatively constant quantities of these goods C. Large income elasticities because they are relatively inexpensive D. Small income elasticities because consumers buy proportionately more of both goods at higher income levels than they buy at a low income levels Food and clothing tend to have A. Large income elasticities because they are necessities B. Small income elasticities because consumers, regardless of their incomes, chose to buy relatively constant quantities of these goods C. Large income elasticities because they are relatively inexpensive D. Small income elasticities because consumers buy proportionately more of both goods at higher income levels than they buy at a low income levels A. Large income elasticities because they are necessities B. Small income elasticities because consumers, regardless of their incomes, chose to buy relatively constant quantities of these goods C. Large income elasticities because they are relatively inexpensive D. Small income elasticities because consumers buy proportionately more of both goods at higher income levels than they buy at a low income levels

Explanation / Answer

The income elasticity of the necessary goods tends to be small because regardless of the income of the consumer's people buy the constant amount of goods.

Since food and cloth are the necessary goods, so its elasticity will be small because regardless of the income of the consumer's people buy the constant amount of goods.

Hence option B is the correct answer,

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