ECON難題2

Q: [An increase in income will always lead to an increase in demand for a good.] Do you agree? Give reasons to support your answer.
A: I disagree with this statement. It depends on whether it is a normal good or an inferior good.
For the former, it includes TV sets, air conditioners, jewellery, etc. Most individuals will buy more when they have more incomes. So in this case, increase in income will lead to an increase in demand for the good.
For the latter, it is of low quality like rice. When people have more income, most of them will switch to more high - quality goods. Then this time, increase in incomes will lead to a decrease in demand for the good.
In conclusion, an increase in income will NOT always cause an increase in demand for a good.

2008-06-19 23:56:23 補充：
Hey, mohauni: Are you sure that garment is an inferior good? Garment is a type of fashion and how come it is both a normal good and an inferior good ( as you mentioned )?! I am sorry to say that your answer is full of contradiction!

2008-06-20 00:17:45 補充：
Maybe you are not wrong, but it is not a good example.
My teacher says inferior good means "cheap嘢"."成衣" may somehow has such property but it is something that in the boundary line. Maybe some teachers do not accept that.

2008-06-20 00:23:03 補充：
The problem comes from [quality]. Some garment can have very high - quality ( e.g. those in the US ) and it might not match so well with the description of inferior goods.

Garment have many types and quality,so cannot be defined as inferior good.

No.

An increase in income will always lead to
an increase in demand for a NORMAL GOOD(e.g.fashion)
but not for a good of any types.

And, it will lead to a FALL in demand for
an INFERIOR GOOD,e.g.garment.

2008-06-20 00:12:01 補充：
As I know garment simply means general clothing
and my econ teacher translated it as "成衣" in Chinese,
while fashion（時裝） is obviously of better quality and "fashionable".

2008-06-20 00:27:57 補充：
After reading your view ,
I agree that it is not a good example.

But I do not think my ans. is full of contradiction
Of course,some "STRICT" teachers do not accept that., and you.

Sorry for my impoliteness

2008-06-20 00:36:40 補充：
"Some" garment can have very high - quality ( e.g. those in the US ) and it "might not" match so well with the description of inferior goods.

Maybe,
I should state clearly that the "garment" I mentioned is general garment

Thanks for you additional info. and your reminding