Inferior vs. Normal Goods
This guide has students determine the difference between inferior goods and normal goods using a scene with Gi-hun and his daughter.
Gi-hun is a divorced dad with a gambling problem and massive debts who lives with his mother. He has had a bad day: after stealing his mom’s debit card, he recklessly gambled her money on horse races, then lost his winnings and got beaten up by his loan shark. All this happens on his daughter Ga-yeong’s 10th birthday. He wanted to buy her something really nice for dinner but all he could afford is tteokbokki (spicy fish and rice cakes). When Ga-yeong tells him that her stepdad took her to a steak house that day, she can see the disappointment on his face, so she tells him that she likes tteokbokki most of all but that her mom won’t let her eat it at home because she considers it to be junk food.
How do we define an inferior good?
A. A good we buy less (more) of when we have more (less) income.
B. A good we buy more of when we have more income.
C. A good we buy less of when we have less income.
D. A good we buy the same amount of when we have more income.
How would we categorize tteokbokki and steak? As inferior goods, necessities or luxuries?
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A good we buy less (more) of when we have more (less) income.
Tteokbokki is an inferior good. Gi-hun only buys this for his daughter because he can’t afford anything better. Ga-yeong’s mom won’t let her eat this at home because she considers it to be junk food. Steak is a luxury good, one which poor people can’t afford. As income rises people consume more steak.