For which of the following good is the income elasticity of

For which of the following good is the income elasticity of demand likely highest natural gas hamburgers doctor\'s visite boats

Solution

Income elasticity of income measures the % change in demand of a good for 1% change in income of the consumer. A good is normal when its income elasticity is positive.

Income elasticity is also higher for staples and necessity goods compared to luxury and non-necessity goods.

Hamburger is an everyday staple and is likely to be consumed more as income increases.

So, correct option is (B).