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Growth Maximization

Introduction

Giffen goods are the inferior goods that are tied in the mind of individuals to hard times.These inferior goods are known as Giffen goods named after the British Statistician Sir Robert Giffen. Marshall introduced the Giffen's paradox as an exception to the law of demand in the third edition of his book Principles of Economics (I895) as, ' There are however some exceptions. For instance, as Mr 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. But such cases are rare; when they are met with they must be treated separately (p. 208).’

	Learning Objectives
After reading this chapter, you are expected to learn about: OBSERVE: When income changes how the consumers' respond in the form of changes in demand towards different types of commodities.

Summary

Licensing:

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