Wealthy individuals do not consume the same as those with lower incomes, consumption patterns vary with income, and social influence plays a role in consumption choices.
False. Friedman observed that people with the same income do not consume the same amount regardless of wealth. Instead, wealthy individuals tend to have different consumption patterns, purchasing more expensive goods and services than those with lower incomes. This aligns with Engel's Law, which states that as income rises, the proportion of income spent on necessities like food decreases.
Consumption choices also vary based on social influence, as individuals may emulate the consumption patterns of those around them. Additionally, the distribution of income and consumption can differ, with consumption often being more evenly spread out than income.
Overall, wealthy people tend to buy a wider range of products but may purchase fewer of certain items as their income increases. The relationship between income and consumption is complex, influenced by individual preferences, societal norms, and income levels.
https://brainly.com/question/28314341