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Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992

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BuyFindarrow_forward

Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992
Chapter 4, Problem 6TY
Textbook Problem
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Which of the following items are likely to be normal goods for a typical consumer? Which are likely to be inferior goods?

  1. Expensive perfume
  2. Paper plates.
  3. Secondhand clothing
  4. Overseas trips

To determine

To classify the given goods into normal or inferior goods.

Explanation of Solution

Normal goods: These refer to those goods whose demand rises due to an increase in the income of the consumer.

With an increase in income, demand for better quality goods rises. So, with higher income, a consumer can buy those products that he was not able to afford earlier.

As per the given question, expensive perfumes and overseas trips are normal goods for the consumer because their demand rises with an increment in the income of the consumer...

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