Question

State 2 types of goods with examples.

Answer 1

Explanation:

1. Normal Goods -A normal good means an increase in income causes an increase in demand. It has a positive income elasticity of demand YED. Note a normal good can be income elastic or income inelastic.
2. Inferior good - An inferior good means an increase in income causes a fall in demand. It is a good with a negative income elasticity of demand (YED). An example of an inferior good is Tesco value bread. When your income rises you buy less Tesco value bread and more high quality, organic bread.

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Answer 2

Answer:

☘️A normal good means an increase in income causes an increase in demand. It has a positive income elasticity of demand YED.

☘️A luxury good means an increase in income causes a bigger percentage increase in demand. It means that the income elasticity of demand is greater than one. For example, HD TV’s would be a luxury good. When income rises, people spend a higher percentage of their income on the luxury good.

☘️An inferior good means an increase in income causes a fall in demand. It is a good with a negative income elasticity of demand (YED). An example of an inferior good is Tesco value bread. When your income rises you buy less Tesco value bread and more high quality, organic bread.