Question

What does the statement Life is a "luxury good" mean in economic terms?

It was estimated that the value of life exhibits the income elasticity substantially greater than 1.

It was estimated that the value of life exhibits the income elasticity substantially smaller than 1.

It was estimated that the value of life exhibits the price elasticity substantially greater than 1

. It was estimated that the value of life exhibits the price elasticity substantially smaller than 1.

Only wealthy people can afford to buy significantly "more life" through investing more in medical care.

Answer 1

Luxury good is nothing but opposite of necessity good where a necessity good is something that has price elasticity less than 1 which means even though the price increases the quantity demanded will decrease less proportionately because you need that goes for survival. On the other hand luxury good is a good with elasticity is greater than 1 which means even though the price increases the quantity demanded decreases more proportionately as they are very sensitive to price such as a sports car etc.

Therefore (c) It was estimated that the value of life exhibits the price elasticity substantially greater than 1 is the answer to this question

Because price elasticity is greater than 1

Therefore (a,b,d,e) are wrong to this question