2006-11-12 18:46:58 · 5 answers · asked by lisa 1 in Social Science ➔ Economics
It works both ways.
You pay more to enjoy your time, but you also earn more.
2006-11-12 18:55:41 · answer #1 · answered by Anonymous · 0⤊ 0⤋
When the price for time gos up, so does income. The increase in the demand for leisure is due to the income effect. The demand for a giffen good increases with a price increase, holding income constant.
2006-11-13 06:12:28 · answer #2 · answered by meg 7 · 0⤊ 0⤋
Giffen good are inferior goods ,whoes market value is not much and potential consumer of these goods are those people who belong to low income groups.
leisure on the other hand is a good that is expensive and is purchased by those ppl who have the ability to purchase them.
But both giffen and leisure goods are exception to the Law of demand.When it comes to Giffen goods ,when prices of these goods fall the demand for them also falls. eg if the price of a giffen good like potato falls say from 2$/kg to say 1$/kg ,then a person will buy only 1kg of potato as he did before and the spare money or the money left or the disposible income will be uitilized to buy another good which he/she was unable to buy before.Incase of Leisure items as the price rises the prestidge value will also rise . A rich person will think that a good that cannot be purchased by others can be purchased by a few persons like me only ,so he will purchase it more and more to increase his prestidge.
giffen goods: potato, salt , match sticks etc
leisure goods:diamonds, BMW etc
2006-11-13 03:22:17 · answer #3 · answered by rishi7100 2 · 0⤊ 0⤋
Leisure is not really a good.
Can you really say that the price of time goes up? What is this price?
The classic example of a Giffen good is margarine which is bought by those on a low income as a cheap alternative to butter, which they would prefer. If the price of margarine falls then demand also falls as consumers switch part of their margarine consumption to their preferred good butter.
Leisure is clearly not like this - there is no preferred alternative to which consumers can switch their demand.
I believe that Giffen goods are only defined as such if demand falls when price falls, not that demand rises when price rises.
2006-11-13 03:16:04 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Because the price of time is wages/salary.
So you are 'cheating' by disguising an increase in income as an increase in prices.
2006-11-14 08:47:46 · answer #5 · answered by ekonomix 5 · 0⤊ 0⤋