Change in consumer income, Microeconomics

Change in consumer income:

A change in consumer income may bring about a change in the quantity demanded of a good or service. However, the direction of change in quantity demanded will depend on the type of commodity in question. For a normal good, the quantity demanded might increase when consumer income increases and quantity demanded might fall when consumer income falls, ceteris paribus. Therefore, inferior goods are those goods that we consume more when we are worse of financially and less when we are better of. For instance who would want to buy “second hand” goods when he becomes richer? For a necessity, a change in consumer income may not affect quantity demanded.

Posted Date: 1/2/2013 1:14:53 AM | Location : United States







Related Discussions:- Change in consumer income, Assignment Help, Ask Question on Change in consumer income, Get Answer, Expert's Help, Change in consumer income Discussions

Write discussion on Change in consumer income
Your posts are moderated
Related Questions
Problem 1: The last half-century has witnessed major changes in the role that governments of developing countries have played, especially in terms of public spending. (a) Ex

Question 1: i) Elaborate on how CPI is used to calculate inflation and what are the limitations of such a measure? ii) Growth is always beneficial. Discuss iii) Explain


Diversification  - Assume that a firm has a choice of selling air conditioners, heaters, or both of them. - The probability of it being hot or cold is 5%. - The firm woul


4) The prevention of major swings in economic activity can be handled most easily by the A. household sector B. business sector C. financial sector

Following the tremendous success of the 'Matthew Hayden Cookbook', we are once more welcomed into the home-and, more importantly, the kitchen!- of Australia's gourmet cricketer for

Explain why a perfectly competitive firm does not expand its sales without limit if its horizontal demand curve indicates that it can sell as much as it desires at the current mark

Continuity and Regularity: We should make it a point that once we have entered the market for a particular commodity and have gained some foothold in it, we must strive to ma

The Standard Indifference Curve Diagram. The standard model of labour leisure choice does not distinguish between females and males. It is a unisex model. The vertical axis gives