Approximately what percentage of their income do the world's poorest people spend on food?

• A. About 60-80%
• B. Less than 20%
• C. About 30-40%
• D. Over 90%

Answer: (A)

Verified step by step guidance

1. Understand the concept of income elasticity and expenditure shares: poorer households tend to spend a larger proportion of their income on necessities like food compared to wealthier households.
2. Recall Engel's Law, which states that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises.
3. Recognize that the world's poorest people have very limited income, so a significant portion of their income must go toward basic needs such as food.
4. From empirical studies and global data, note that the poorest populations typically spend a majority of their income on food, often between 60% and 80%.
5. Compare the given options with this understanding to identify that the correct range for the poorest people's food expenditure share is about 60-80% of their income.