- Neutral good
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This article is about an economic term. For Dungeons & Dragons-related term, see Alignment (Dungeons & Dragons)#Neutral good.
In economics, neutral goods are goods that have a demand that is not dependent to the income.
Examples of neutral goods include prescription medicines for people with medical conditions, such as insulin for diabetics. Although an individual's income may vary their consumption of vital prescription medicines will remain constant.
An alternative definition says that, a good is a neutral good if the consumer does not care about its consumption at all. That is, the consumption of that good will not increase the consumer's utility. For example, if a consumer likes texting, but not data package on his phone contract (i.e.data package is the neutral good here), then increasing the amount of data allowance will not increase his utility. If an indifference curve is constructed such that Data Allowance is measured on Y axis and Texting is on X axis, the indifference curve will be a vertical line.[1]
References
- ^ Hal R. Varian, Intermediate Microeconomics: A Modern Approach, Seventh Edition, Norton, 2006
Types of goods public good - private good (includes household goods) - common good - common-pool resource - club good - anti-rival good
(non-)rivalrous good and (non-)excludable good
complementary good vs. substitute good vs. independent good
free good vs. positional good(non-)durable good - intermediate good (producer good) - final good - capital good
inferior good - normal good - neutral good - ordinary good - Giffen good - luxury good - Veblen good - superior good
search good - (post-)experience good - credence good
damaged good - composite good - intangible goodCategories:- Goods
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