In many developing countries there are sudden leaps in consumption from one good to another. An example is transport. At low levels of GDP, people often use bicycles or motor scooters. As income rises, there is often a dramatic switch to motor cars, such that bicycles and scooters are much rarer. How can these jumps be explained in terms of normal and inferior goods?

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The Answer of In many developing countries there are sudden leaps in consumption from one good to another. An example is transport. At low levels of GDP, people often use bicycles or motor scooters. As income rises, there is often a dramatic switch to motor cars, such that bicycles and scooters are much rarer. How can these jumps be explained in terms of normal and inferior goods?

In Many Developing Countries There Are Sudden Leaps in Consumption