Share of food in total consumption expenditure has been coming down as per capita income grew over time in the last sixty years b…

Question

Share of food in total consumption expenditure has been coming down as per capita income grew over time in the last sixty years because

1. A. People have been purchasing less food
2. B. People have been preferring non-cereal items in their food basket
3. C. Growth in food expenditure has been lower than growth in per capita income (Correct answer)
4. D. Percentage of the poor in population has increased over time

Correct Answer

Option C — Growth in food expenditure has been lower than growth in per capita income

Detailed Solution & Explanation

The correct answer is Growth in food expenditure has been lower than growth in per capita income.

Key Points

• As per capita income rises, the share of food in total expenditure decreases — this is known as Engel's Law.
• As incomes grow, consumers spend relatively more on non-food items (education, health, entertainment).
• The absolute amount spent on food may increase, but its share in total spending falls.