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Question : Which law states that with constant taste and preference, the proportion of income spent on food stuff diminishes as income increases?

Option 1: Say's Law

Option 2: Griffin's Law

Option 3: Gresham's Law

Option 4: Engel's Law


Team Careers360 13th Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: Engel's Law


Solution : The correct option is Engel's Law .

According to Engel's Law, even though the quantity spent on food increases in absolute terms, the percentage of income spent on food drops as income rises. Based on the observation that when income levels rise, people tend to spend a smaller proportion of their income on necessities like food and have more money available for other purchases.

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