how did the harraoans decorate the day vessls.(2mark answer)
Answers
In Kerala, rice is a staple food. No one chooses their staple food(s), it is what nature bestows up on the area around your habitat.
The interesting fact about staple food is - you eat it no matter who you are. Rice is cooked in every house of Kerala whether it belongs to a below poverty line family or a well-to-do family.
The second interesting fact about rice (probably just a corollary of the first interesting fact) is that there is no close substitute of rice. Is there a single substitute which could replace rice everywhere it is used? No!
This means rice is a Giffen good.
To understand this particular economics jargon, let’s say, you have only two edible items that you can buy - rice and fish.
When the prices of these items rise, your money's value goes down.
Let’s say you used to buy 1 kg rice and 1 kg fish for Rs. 100 and Rs. 400 each per month; meaning you used to spend Rs. 500 on them.
Now, the Rs. 500 that you can spend hasn’t changed. However, the purchasing power of the same money has gone down. Let’s assume this makes the price of 1 kg rice as Rs. 200 and the price of 1 kg fish as Rs. 800.
What would you do in a scenario like this? Well, if you haven’t been in such a position, you’d quickly say you’d buy half the quantities of both rice and fish that you used to buy last month since the prices have doubled.
Although the prices have doubled, your hunger hasn’t halved. It’s still at the same level. To feed yourself the same amount of food/calories, you’d buy only 250 gms of fish for Rs. 200 and 1.5 kg of rice for Rs. 300.
A Giffen good is an (inferior) item whose demand increases as the price increases!
The same applies to a Veblen good. To differentiate between a Giffen good and a Veblen good, try to remember that rice is a Giffen good whereas an iPhone is a Veblen good.
People buy more rice as the price increases because there are no close substitutes.
People also buy more iPhones as the price increases because it is fashionable to do so.