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  • 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. 

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