Explore BrainMass
Share

Explore BrainMass

    Income Elasticity for Staple Foods

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The income elasticity for most staple foods, such as wheat, is known to be between zero and one.
    a. As incomes rise over time, what will happen to the demand for wheat?
    b. What will happen to the quantity of wheat purchased by consumers?
    c. What will happen to the percentage of their budgets that consumers spend on wheat?
    d. All other things equal, are farmers likely to be relatively better off or relatively worse off in periods of rising incomes?

    © BrainMass Inc. brainmass.com October 9, 2019, 9:40 pm ad1c9bdddf
    https://brainmass.com/economics/macroeconomics/income-elasticity-for-staple-foods-193921

    Solution Preview

    The income elasticity for most staple foods, such as wheat, is known to be between zero and one.

    a. As incomes rise over time, what will happen to the demand for wheat?

    The demand for wheat is going to increase - but not as fast as the income ( think of it whis way, if you start to earn $100 more, you will probably ...

    Solution Summary

    This solution provides brief explanations for the four income elasticity questions.

    $2.19