2012年11月7日星期三

Response to Chapter 3

            Normally speaking, as one's income increases, one will buy Starbucks coffee rather than Folgers coffee. Therefore Folgers coffee is considered inferior goods and Starbucks coffee is considered normal goods. However, as long as I am concerned, my demand for either Folger coffee or Starbucks coffee won't change as my income increases because I do not drink coffee.
          
       In my opinion, whether a good in inferior or normal depends on individual tastes and preference. For example, spam is normally regarded as an inferior goods because people's demand for it usually decreases if their purchase ability increases. Before coming to American, I never bought spam because Chinese cuisine seldom use it. However, I buy more spam now because spam tastes good and it is easy to cook. Although I don not have a job or salaries, spam is never an inferior goods to me as I actually get more pocket money from my parents after coming to America. 
         
         Another example comes from my parents, who always prefer to drink instant coffee than to drink  Starbucks coffee. When their income increases, they actually buy more instant coffee because they like drinking it. So to my parents, instant coffee, which is cheaper than Starbucks coffee, is not an inferior goods.
             
          I can understand that the definitions of inferior goods and normal goods applies to a majority of people, but it is not always true for everyone since people's tastes vary from each other. So a question raises in my mind: "Why is it necessary to divide the goods between inferior and normal if these two terms are not necessary true for everyone?"

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