economics medium MCQ

Engel's Law postulates that as a family's income increases, the percentage of its total income spent on food will:

  1. Increase proportionately
  2. Decrease, even if absolute expenditure on food rises
  3. Remain exactly constant
  4. Fluctuate randomly based on market prices

Answer: Decrease, even if absolute expenditure on food rises

Engel's Law is a fundamental observation in development economics. Because human caloric needs are biologically capped, wealthier families quickly satisfy their basic food requirements. As their income grows further, the marginal propensity to consume food drops, and they allocate a progressively larger share of their budget to luxuries, services, healthcare, and education.

Topic Microeconomics - Consumer Behavior
Exam Relevance UPSC Prelims, SSC CGL
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