Normal GoodsIn Figure 3.1, both goo

Normal Goods
In Figure 3.1, both good X and good Y increase as income increases. Goods that
follow this tendency are called normal goods. Most goods seem to be normal
goods—as their incomes increase, people tend to buy more of practically


Inferior Goods
The demand for a few unusual goods may decrease as a person’s income increases. Some proposed examples of such goods are ‘‘rotgut’’ whiskey, potatoes, and secondhand clothing. This kind of good is called an inferior good. How the demand for an inferior good responds to rising income is shown in Figure 3.2. The good Z is inferior because the individual
chooses less of it as his or her income increases. Although the curves in Figure 3.2 continue
to obey the assumption of a diminishing MRS, they exhibit inferiority.

CHANGES IN A GOOD’S PRICE
Examining how a price change affects the quantity demanded of a good is more complex than looking at the effect of a change in income. Changing the price geometrically involves not only changing the intercept of the budget constraint but also changing its slope. When a price changes, it has two different effects on people’s choices. There is a substitution effect that occurs even if the individual stays on the same indifference curve because consumption has to be changed to equate the MRS to the new price ratio of the two goods. There is also an income effect because the price change also changes ‘‘real’’ purchasing power. People will have to move to a new indifference curve that is consistent with their new purchasing power. We now look at these two effects in several different situations.


Substitution and Income Effects from a Fall in Price
Let’s look first at how the quantity consumed of good X changes in response to a
fall in its price. Remember that the budget constraint meets the Y-axis at the point where
all available income is spent on good Y. Because neither the person’s income nor the
price of good Y has changed here, this Y-intercept is the same for both constraints.
The newX-intercept is to the right of the old one because the lower price ofXmeans
that, with the lower price, this person could buy more X if he or she devoted all
income to that purpose. The flatter slope of the budget constraint shows us that the
relative price of X to Y (that is, PX/PY) has fallen.

Substitution Effect
There, the new budget line is tangent to the indifference curve
U2. The movement to this new set of choices is the result of two different effects.
First, the change in the slope of the budget constraint would have motivated this
person to move to point B even if the person had stayed on the original indifference
curve U1.


Income Effect

The Effects Combined: A Numerical Example
People do not actually move from A to B to C when the price of good X falls. We
never observe the point B; only the two actual choices of A and C are reflected in
this person’s behavior. But the analysis of income and substitution effects is still
valuable because it shows that a price change affects the quantity demanded of a
good in two conceptually different ways.

Determining precisely how this person will change his or her spending is not
possible unless we know the form of his or her utility function. But, even in the

Hasil (Bahasa Indonesia) 1:

Barang normalPada gambar 3.1, baik X dan Y baik meningkatkan sebagai pendapatan meningkat. Barang yangmengikuti kecenderungan ini disebut barang-barang yang normal. Sebagian besar barang tampaknya menjadi normalbarang — sebagai meningkatkan pendapatan mereka, orang-orang cenderung membeli lebih praktisBarang inferiorPermintaan untuk beberapa barang yang tidak biasa dapat menurun sebagai seseorang pendapatan meningkat. Beberapa contoh yang diusulkan barang-barang tersebut adalah '' rotgut'' wiski, kentang, dan Pakaian bekas. Baik semacam ini disebut barang inferior. Bagaimana menanggapi permintaan untuk barang inferior meningkatnya pendapatan diperlihatkan di gambar 3.2. Z baik lebih rendah karena individumemilih kurang dari itu sebagai pendapatan nya meningkat. Meskipun terus kurva di gambar 3.2mematuhi asumsi MRS semakin berkurang, mereka menunjukkan inferioritas.PERUBAHAN DALAM HARGA YANG BAIKMemeriksa bagaimana perubahan harga mempengaruhi jumlah permintaan yang baik lebih kompleks daripada melihat efek dari perubahan dalam pendapatan. Mengubah harga geometris melibatkan tidak hanya mengubah intersepsi dari anggaran kendala tetapi juga mengubah lereng. Ketika perubahan harga, ia memiliki dua efek yang berbeda pada pilihan rakyat. Ada efek substitusi yang terjadi bahkan jika individu tetap pada kurva ketidakpedulian yang sama karena konsumsi harus diganti untuk menyamakan MRS rasio harga baru barang dua. Ada juga efek pendapatan karena perubahan harga juga perubahan '' nyata '' daya beli. Orang-orang akan pindah ke kurva baru ketidakpedulian yang konsisten dengan daya beli mereka baru. Kita sekarang melihat dua efek dalam beberapa situasi yang berbeda.Substitusi dan efek pendapatan dari penurunan hargaMari kita lihat pertama pada bagaimana kuantitas dikonsumsi baik X perubahan dalam menanggapijatuh harga. Ingat bahwa kendala anggaran yang memenuhi sumbu y pada titik manaSemua tersedia pendapatan yang dihabiskan di baik Y. Karena pendapatan tidak seseorang maupunharga baik y telah berubah di sini, ini Y-intercept adalah sama untuk kedua kendala.NewX-mencegat adalah di sebelah kanan yang lama karena rendah harga ofXmeansbahwa, dengan harga yang lebih rendah, orang bisa membeli lebih X jika dia mencurahkan seluruhpendapatan untuk tujuan itu. Lereng menyanjung kendala anggaran yang menunjukkanrelative price of X to Y (that is, PX/PY) has fallen.Substitution EffectThere, the new budget line is tangent to the indifference curveU2. The movement to this new set of choices is the result of two different effects.First, the change in the slope of the budget constraint would have motivated thisperson to move to point B even if the person had stayed on the original indifferencecurve U1.Income EffectThe Effects Combined: A Numerical Example People do not actually move from A to B to C when the price of good X falls. Wenever observe the point B; only the two actual choices of A and C are reflected inthis person’s behavior. But the analysis of income and substitution effects is stillvaluable because it shows that a price change affects the quantity demanded of agood in two conceptually different ways.Determining precisely how this person will change his or her spending is notpossible unless we know the form of his or her utility function. But, even in the