Changes in how much money people make can really affect what they want to buy. This is mostly explained by something called the law of demand.
When people have more money, they usually want to buy more things. Here’s how it works:
More Demand for Normal Goods: These are items that people want more of when they have extra money. For example, people might want to buy fancy clothes or high-quality gadgets when they can afford it.
Less Demand for Inferior Goods: On the flip side, when people have more money, they often buy less of what we call inferior goods. These are cheaper items people might buy when they can’t spend as much. Think about instant noodles or store-brand products—when folks have more cash, they might choose to buy better food instead.
Now, if people start to make less money, the opposite can happen. They may want to buy fewer normal goods and more inferior goods.
This shows just how much our income affects what we like to buy!
Changes in how much money people make can really affect what they want to buy. This is mostly explained by something called the law of demand.
When people have more money, they usually want to buy more things. Here’s how it works:
More Demand for Normal Goods: These are items that people want more of when they have extra money. For example, people might want to buy fancy clothes or high-quality gadgets when they can afford it.
Less Demand for Inferior Goods: On the flip side, when people have more money, they often buy less of what we call inferior goods. These are cheaper items people might buy when they can’t spend as much. Think about instant noodles or store-brand products—when folks have more cash, they might choose to buy better food instead.
Now, if people start to make less money, the opposite can happen. They may want to buy fewer normal goods and more inferior goods.
This shows just how much our income affects what we like to buy!