![]() ![]() The standard textbook example of a Giffen good, potatoes during the Irish Potato Famine of 1845–1849 ( Paul A. Stigler (1947) and Roger Koenker (1977) argue that demand for neither bread nor wheat was upward sloping in Britain during Marshall’s time. Since Marshall’s time, a discussion of “Giffen” behavior has found its way into virtually every basic economics course, despite a lack of real-world evidence supporting Marshall’s conjecture. Giffen has pointed out, a rise in the price of bread makes so large a drain on the resources of the poorer labouring families and raises so much the marginal utility of money to them, that they are forced to curtail their consumption of meat and the more expensive farinaceous foods: and, bread being still the cheapest food which they can get and will take, they consume more, and not less of it (208). ![]() Alfred Marshall first publicized this idea in the 1895 edition of his Principles of Economics:Īs Mr. Economists have long recognized, however, that the axioms of consumer theory do not guarantee that demand curves must slope downward, and that the Law of Demand, while descriptively valid in many situations, may not apply to very poor consumers facing subsistence concerns. The “Law of Demand,” which holds that as the price of a good increases, consumers’ demand for that good should decrease, is one of the bedrock principles of microeconomics. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |