Income Elasticity Exceeds 1 for Biscuits

Steps:

• Identify income elasticity of demand (IED) formula: %ΔQ / %ΔIncome, where Q is quantity consumed.
• From the table, calculate % change in biscuit consumption and income over the range; the ratio >1 indicates luxury good status.
• Repeat for coffee; ratio <1 shows necessity good.
• Compare to options: only A matches biscuits as luxury (IED >1).

Why A is correct:

• IED >1 for biscuits means consumption rises more than proportionally with income, defining a luxury good per economic theory.

Why the others are wrong:

• B: Biscuit consumption changes with income, so IED ≠0.
• C: Coffee IED <1 is true but not the focus; question seeks true statement, and A is also true.
• D: Coffee IED ≠1, as it's a necessity with IED <1.

Not enough information: Table data needed for precise calculation, but assuming standard values where biscuits are luxury supports A.

Final answer: A