Jill consumes nothing but soup and cola.It is possible that both soup and cola are necessities for Jill.

Question

Quizplus · Accepted Answer

The weighted sum of income elasticities must add up to one.This implies that at least one income elasticities must be >1.Intuitive response - if income rises,the weighted percentage increase in consumption cannot exceed the percentage increase in income without violating the budget constraint.

Jill Consumes Nothing but Soup and Cola