How does a change in a person’s income effect their demand for a normal good and an inferior good? Give an example of a normal good and inferior good.
An inferior good is a kind of good whose demand decreases or drops when there is a rise or increase in people's income and vise versa. The inferior goods will be more affordable kind of substitute mainly for more expensive goods when there is a contraction in the economy as well as when the people's incomes are low that means when people have low income.
Normal goods are just opposite of inferior good which means normal goods are kind of goods those goods demand will rise or increase when the income of consumer rises. The demand for goods increase when there is an increase in income.
Best example for inferior goods are grocery store products which mainly don't have any kind of brand name or company name such as cereals, peanut butter which don't have a brand name .The consumer will use cheaper brand products when they have less income and when consumers have high salary or when their income is high they will go for high brand or for costly brand products.
Best example for normal goods are LCD television, expensive cars, branded cloths , diamond etc. The demand for this kind of goods increases only if consumers income increases. Inferior goods are just opposite of normal goods.