Living Economics

More Money, More Options
Terrence Cosby
Fast foods are inferior goods that are used more when income is low. "Sit down" restaurant meals are normal goods that are consumed more when income is high.

During last summer, I had two jobs. The first was at The Finish Line, an athletic apparel store. The job afforded me the opportunity to come into contact with many different kinds of people and I also received a handsome discount on merchandise. The only major drawback was the minimum wage. With my low income, I was relegated to eating fast food at establishments like Krystal's and Wendy's. Ever conscious of my small fortune, the bill on my meals rarely, if ever, exceeded five dollars.

Later in that same summer, I got a more lucrative job occupation as a cargo handler at Federal Express. At Fed Ex my duties were a bit more complex than selling shoes and shirts as I had done earlier. Now I was a part of a team that loaded and unloaded large aircrafts such as DC-10s and MD-11s. With an increased work load came a larger salary. At that point I made twice as much as I had at my previous job. With more money at my disposal, I could have conceivably ordered twice as much food from the fast food restaurants, but that was not to be the case. Instead, I ate more meals in more expensive "sit down" restaurants.

Inferior and Normal Goods

In economic terms, I guess you can call fast food inferior goods. That is, a good for which an increase in income causes a decrease in demand, or a leftward shift in the demand curve. "Sit down" restaurant meals are more like normal goods. That is, a good for which an increase in income causes an increase in demand, or a rightward shift in the demand curve.

Note:
  1. Terrence Cosby is an undergraduate at the University of Memphis, Memphis, TN
  2. Terrence Cosby is an undergraduate at the University of Memphis, Memphis, TN
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