Basic Goods are those material things used to satisfy human requirements that are needed to survive, like food, shelter and clothing.
Examples of basic goods are:
Differente countries can have different basic goods: a good can be classified as basic in one country, and not in another country. It depends on the economic structure of the country, availability of goods and sociocultural factors: conrmeal is a basic good in Mexico and not in Bangladesh, while rice is a basic good in Bangladesh and not in Mexico.
Elasticity
Basic good have low income elasticity and low price demand elasticity.
Low income elasticity: The quantity demanded changes less than proportionally with respect to the income.
Low price elasticity: The quantity demanded changes less than proportionally with respect to it's price.
Share of the Expense on Basic Goods
In countries with high per capita income levels, the share of the expenses on basic goods, with respect to total expenses, is low. This share grows for low per capita income countries.
Discussion