I was teaching basic Supply and Demand curves yesterday. One thing this basic lesson would teach us for something to be bought and sold their must be someone willing to purchase a product. You have to wonder who are these people that want Budweiser and Clamato or Bacom Flavored Mints (notice the mints are on stupid.com). I guess a meal of those could only be wiped away with a life sized toothbrush.
Another thing I taught about what changes (or shifts) the relationship between how much people are willing to purchase at a given price. One thing clearly is income, at least that is what the government is hoping with the stimulus package. However, some things you buy more of when you have less income (these are called inferior goods) think Ramen Noodles, Mac & Cheese or other cheap foods. My students suggested 1 ply toilet paper is also a product like this. The Freakonomics blog pointed to a news story that sales of Kraft Mac & Cheese are way up. If Mac and Cheese is an inferior good could it be sign of a recession as their link title suggests? However as a commenter named Jesse pointed out most of the sales spike is due to easy Mac (the new microwavable version), I like his/her final thought on Easy Mac.
“They buy Easy Mac because they’re busy, lazy, or more likely, so their kids can feed themselves.”
So perhaps Easy Mac is a good where as income goes up and we have higher costs of cooking time, we purchase more.
One final claim from the mac and cheese article “one-third of the U.S. population and half of the country's children will feast on macaroni and cheese at some point during the next two weeks.”
So that’s your Friday random thought. Have a good weekend!
1 comment:
I don't think a brand-name product like Kraft Mac and Cheese can be considered a truly inferior good. Choosy moms with resources choose Kraft, those with less to spend buy store brand. If it is a staple as the article suggests, as income rises, people don't necessarily consume less macaroni -- they consume the same amount of more expensive macaroni (with EZ Mac being the epitome of cost and wastefulness).
Only at the store-brand subsistence level (i.e. we eat whatever's on sale this week) can you begin to discuss the interchangeability of (textbook) inferior goods such as macaroni, baked beans and spaghetti-os.
The German equivalent of the feel-good kiddie mac and cheese dinner? Creamed spinach and scrambled eggs. I only wish I were kidding.
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