Check out these other AP Macro resources
- There are many different types of goods in the world of economics 🌎
- Below are a list of them along with definitions & examples ⬇️
A Plethora of Goods in 1 Place 😲
Substitutes: This applies to the relationship of 2 goods. The rise in the price of 1 good leads to an increase of demand for the other good (if its cost remained unchanged) & vice versa.
- ex: Coffee ☕️& Tea 🍵: if the price of coffee goes up, the demand for tea will increase
Complements: This applies to the relationship of 2 goods as well. The rise in the price of 1 good leads to a decrease in demand for the other good & vice versa
- ex: Creamer 🥛& Coffee ☕️: If the price of coffee goes up, the demand for creamer will decrease because people aren't buying coffee, so they don't need creamer
Normal Good: A rise in income increases the demand for a good
- ex: Steak 🥩
Inferior Good: A rise in income decreases the demand for a good
- ex: Ramen 🍜
Hope this helped. Till next time rêveur.