Definition – Supplementary goods are two goods that are used together. For example, if you have a car, you also need petrol to run the car. If you have a tv, a supplementary good would be an Amazon widget which allows you access to a much greater range of tv programmes. Examples of supplementary good …
Definition of Merit Good A merit good has two characteristics: People do not realise the true personal benefit. For example, people underestimate the benefit of education or getting a vaccination. Usually, these goods also have a positive externality. Therefore in a free market, there will be under consumption of merit goods. Examples of Merit Goods …
Definition of substitute goods – Substitute goods are two alternative goods that could be used for the same purpose. Substitutes present the consumer with alternative choices. If the price of one good increases, then demand for the substitute is likely to rise. Therefore, substitutes have a positive cross elasticity of demand. Graph of two substitute …
A list of different types of economic goods. Income elasticity of demand and types of goods Income elasticity of demand (YED) measures the responsiveness of demand to a change in income. Normal good A normal good means an increase in income causes an increase in demand. It has a positive income elasticity of demand YED. …
With any new technology – especially electronic goods (TVs, computers, cameras), we tend to see a sharp fall in price over time. Initially, the new technology is very expensive, and a high percentage of disposable income, but over time, prices tend to fall considerably. There are a number of reasons to explain this fall in …
Complementary goods are products which are used together. Examples DVD player and DVD disks to play in it. Tennis balls and tennis rackets. Mobile phones and mobile phone credit for making calls. iPhone and Apps to use with an iPhone. Petrol and car. Complementary Goods and Cross Elasticity of Demand Complementary goods will have a …
Definition An economic good is a good or service that has a benefit (utility) to society. Also, economic goods have a degree of scarcity and therefore an opportunity cost. This is in contrast to a free good (like air, sea, water) where there is no opportunity cost – but abundance. Free goods cannot be traded …
Should I boycott goods made in sweatshop factories? Another question from – What would Keynes do? This is a dilemma for an economist. If we boycott goods made in ‘sweatshop factories’ – does it help or hinder workers in developing economies? Firstly, when we hear about working conditions in some ‘sweatshop factories’ – low pay, …