Siteadmin, Bureaucrats, Check users, nsAm_Govt_101RO, nsAm_Govt_101RW, nsAm_Govt_101_ta, nsJudgesRO, nsJudgesRW, nsJudges_talkRO, nsJudges_talkRW, nsTeam2RO, nsTeam2RW, nsTeam2_talkRO, nsTeam2_talkRW, oversight, Administrators
125,790
edits
Changes
Jump to navigation
Jump to search
mLine 38:
Line 38: − +
improved
=== For Honors Students Only: Giffen Goods ===
=== For Honors Students Only: Giffen Goods ===
Last class, we mentioned an odd type of good known as an “inferior” good. You may recall that the demand for an “inferior” good actually increases when income decreases. Examples are margarine (because people with declining income can less afford butter). Bankruptcy services are “inferior”, because when income declines, more people file for bankruptcy, and the greater the demand for bankruptcy services.
Last class, we mentioned an odd type of good known as an “inferior” good. You may recall that the demand for an “inferior” good actually increases when income decreases. Examples are margarine (because people with declining income can less afford butter). Bankruptcy services are “inferior”, because when people's income declines, more of them file for bankruptcy, and then there is a greater demand for bankruptcy services.
'''''Question''''': If a good is inferior, does a decrease in its price cause an increase in quantity demanded?
'''''Question''''': If a good is inferior, does a decrease in its price cause an increase in quantity demanded?