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A good in economics is any object, service or right that increases utility, directly or indirectly. A good that cannot be used by consumers directly, such as an "office building" or "capital equipment", can also be referred to as a good as an indirect source of utility through resale value or as a source of income.
They must eat three meals a day, and there are only two options for them: the inferior good, bread, which costs $1 per meal, and the superior good, cake, which costs $4 per meal. Cake is always preferable to bread. At present, the consumer would purchase 2 loaves of bread and one cake, completely exhausting their budget to fill 3 meals each day.
In economics, inferior goods are those goods the demand for which falls with increase in income of the consumer. So, there is an inverse relationship between income of the consumer and the demand for inferior goods. [1] There are many examples of inferior goods, including cheap cars, public transit options, payday lending, and
There are legal definitions. For example, the United States' Consumer Product Safety Act has an extensive definition of consumer product, which begins: CONSUMER PRODUCT.--The term ‘‘consumer product’’ means any article, or component part thereof, produced or distributed (i) for sale to a consumer for use in or around a permanent or temporary household or residence, a school, in ...
Substitute goods are commodity which the consumer demanded to be used in place of another good. Economic theory describes two goods as being close substitutes if three conditions hold: [3] products have the same or similar performance characteristics; products have the same or similar occasion for use and; products are sold in the same ...
A bad lowers a consumer's overall welfare. [3] Economics focuses on the study of economic goods, i.e. goods that are scarce; in other words, producing the good requires expending effort or resources. Economic goods contrast with free goods such as air, for which there is an unlimited supply. [4]
Consumer sovereignty is defined in the Macmillan dictionary of modern economics as: [7] The idea that the consumer is the best judge of his or her own welfare. This assumption underlies the theory of consumer behaviour and through it the bulk of economic analysis including the most widely accepted optimum in welfare economics, the Pareto optimum.
Wild fish are an example of common goods. They are non-excludable, as it is impossible to prevent people from catching fish. They are, however, rivalrous, as the same fish cannot be caught more than once. Common goods (also called common-pool resources [1]) are defined in economics as goods that are rivalrous and non-excludable. Thus, they ...