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 like designer clothing tend to have the highest income elasticity, as they are more responsive to changes in consumer income. As people's incomes rise, they are more likely to splurge on luxury items like designer clothing.

Which of the Following Goods Is Likely to Have the Highest