Questions tagged [giffen-goods]
The giffen-goods tag has no usage guidance.
9
questions
1
vote
1answer
37 views
Whether a good is a Giffen good should be based on circumstance?
The textbook example of a Giffen good is the potato during the Irish Potato Famine. It is characterised by a positive income effect that is larger than the negative substitution effect when the price ...
4
votes
1answer
164 views
Is the consumer surplus on a Giffen/Veblen good negative?
When drawing the demand and supply curves on a quantity/product space for an upwards sloping demand, assuming the two curves intersect, I noticed that the traditional consumer surplus region lies ...
1
vote
1answer
404 views
Giffen Goods & Complementary Goods
Consider that good X and good Y are complements and good X is a Giffen good. If I increase the price of good X, what affect does this have on the price and quantity demanded of good Y?
My reasoning ...
2
votes
2answers
4k views
Difference between Giffen and inferior goods. Why aren't all inferior goods Giffen goods?
What is the difference between an inferior good and a Giffen good?
Are the two following definitions for an inferior good equivalent?
Def 1: An inferior good is a good for which the demand decreases ...
1
vote
1answer
579 views
Verification of understanding of the substitution and income effect of normal, inferior and Giffen goods?
My understanding is as follows:
Normal Goods: Income and Substitution effects are both positive.
Inferior Goods: Income effect negative, substitution effect positive. Substitution effect outweighs ...
-1
votes
1answer
172 views
If the price of a good rises, will the demand always fall?
If the price of a good or service rises, the demand for that product will always fall? Apart from Giffen goods and luxury are there any other cases and what economic analysis supports or argues with ...
0
votes
1answer
191 views
Identify whether a good is giffen good or not and under what condition
Given the following partial information about a consumer's purchases.He consumes only two goods.
In year 1, $p_1^1=p_2^1=100,x_1^1=x_2^1=100$
In year 2, $p_1^2=100,p_2^2=80,x_1^2=120$
Over what ...
2
votes
1answer
300 views
Do standard definitions of substitute goods and complementary goods assume the Law of Demand?
It seems to me that they do. Suppose $x$ is a Giffen good (that is, it violates the law of demand). Then when $p_x$ increases, the quantity of $x$ demanded increases. Suppose also that this increase ...
1
vote
0answers
246 views
How Would a Firm Which Produces a Giffen Good Maximize Profits?
I am curious as to how a firm which produces a giffen good would maximize profits? Having an upward sloping demand curve seems to imply that we cannot guarantee that there exists a quantity where ...
