Spending on necessities and luxuries

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How does an increase of income affect spending on necessities and luxuries?

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As income increases, spending on luxuries increases dramatically, but spending on necessities increases slowly.

As income increases, spending on luxuries increases dramatically and spending on necessities remains unchanged.

As income increases, spending on luxuries increases slowly, but spending on necessities increases dramatically.

As income increases, spending on necessities increases dramatically and spending on luxuries remains unchanged.

Reference no: EM132255491

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