00:01
When the price of a commodity changes, your real purchasing power changes, even if your money income stays the same.
00:08
That change in how rich you feel affects how much you buy.
00:11
When the price falls, you can buy more with the same income, so real income rises.
00:16
When price rises, you can buy less with the same income, so your real income falls.
00:21
For a normal good, when the price falls, you buy more.
00:26
For an inferior, good when the price falls, you buy less.
00:28
When the price of a commodity changes its relative price compared to other goods changes, people substitute toward the cheaper good and away from the more expensive one.
00:39
When the price falls, the commodity becomes relatively cheaper, you buy more...