EWOT Goggles #10 "Law of Demand in China" (11/12/2011)

      While the Law of Demand states that as the price of a good increases, the quantity of the good demanded decreases, Giffen goods seem to defy the Law of Demand. If the price of a good increases, and the quantity demanded increases, this good is said to be a Giffen good. However, economists have had a hard time finding real world examples of Giffen goods. But in part of China, rice appears to be a Giffen good. People need 1600 calories to live per day - this means consuming enough caloric food. The price of meat is expensive (in comparison to rice). As rice prices rose, Chinese could no longer afford meat to supplement their diet and turned to buying more rice (which was still cheaper than meat) in order to get their 1600 daily calories. Giffen goods are rare but a very cool economic anomaly.