Demand and Law of demand



<1> Preference & Utility

Diminishing marginal rate of substitution

<3> Indifference curve & its properties
<4> Special Cases (I)
<5> Special Cases (II)
<6> Budget constraints
<7> Consumer optimal & corner solution
<8> Real Income & Utility
<9> Income effect
<10> Substitution effect
<11> Price effect
<12> Price effect - Decomposition
<13> Giffen Good
A-Level: Demand & Law of demand






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Giffen Good

Giffen good refers to a good whose quantity demanded is positively related to price. (即是當價格上升,需求量會上升;價格下降,需求量會下降。


上圖顯示,在 IC analysis,當價格下降而貨幣入息 (money income) 不變 ,需求量可以上升也可以下降。

Click button Price effect < 0: 若價格下降,需求量上升,Good X 便不是 Giffen Good (Price effect is negative: Px decreases and Qx increases)。

Click button Price effect > 0: 若價格下降,需求量下降,Good X 便是 Giffen Good (Price effect is positive: Px decreases and Qx decreases)。

Giffen Good and Income effect

在 <Price effect - decomposition > 一文中提到 price effect 可分為 substitution effect 和 income effect.

Price effect = substitution effect (S.E.) + Income effect (I.E.)


因此,若只有 substitution effect 而沒有 income effect,價格下降後,需求量必定上升,也不會出現 Giffen good 的情況。

但若 income effect 是 negative (X 為 inferior good) 需求量會因 negative income effect 而減少,若 negative income effect > substitution effect,則整體的需求量將會減少!





Econman (5 / 10/ 2000)