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    There are three types of economic goods: 1. Normal goods are goods for which demand increases as income increases, such as fine dining and luxury cars. 2. Inferior goods are goods for which demand decreases as income increases, such as used cars and non-branded products. 3. Giffen goods are unusual goods for which demand increases as price increases, violating the basic law of demand. Examples could include some low-income, non-luxury goods when close substitutes are lacking.

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    There are three types of economic goods: 1. Normal goods are goods for which demand increases as income increases, such as fine dining and luxury cars. 2. Inferior goods are goods for which demand decreases as income increases, such as used cars and non-branded products. 3. Giffen goods are unusual goods for which demand increases as price increases, violating the basic law of demand. Examples could include some low-income, non-luxury goods when close substitutes are lacking.

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    24 views5 pages

    Economic Goods

    Uploaded by

    Movie Series
    There are three types of economic goods: 1. Normal goods are goods for which demand increases as income increases, such as fine dining and luxury cars. 2. Inferior goods are goods for which demand decreases as income increases, such as used cars and non-branded products. 3. Giffen goods are unusual goods for which demand increases as price increases, violating the basic law of demand. Examples could include some low-income, non-luxury goods when close substitutes are lacking.

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    Economic Goods

    Eco 101
    • Normal Good : In economics, a normal good is any 
    good for which demand increases when income
    increases.Examples - Fine dining, Luxury Cars,
    Private transport.
    Inferior Good : In economics, an inferior good is
    a good whose demand decreases when consumer’s
    income rises (or demand increases when consumer
    income decreases), unlike normal goods, for which
    the opposite is observed. Examples- used cars,
    Pirated Goods, non branded products.
    • Giffen Good -  Giffen good is a product that people consume more
    as the price rises and vice versa—violating the basic law of demand
     in microeconomics.
    Example -
    Characteristics of Giffen Good
    -A Giffen good is a low income, non-luxury product or it can be
    sometimes luxury products depending on certain circumstances for
    which demand increases as the price increases and vice versa.
    -A Giffen good has an upward-sloping demand curve which is
    contrary to the fundamental laws of demand which are based on a
    downward sloping demand curve.
    - Demand for Giffen goods is heavily influenced by a lack of close
    substitutes and income pressures.

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