Talk about substitutes!
Well, from now on when discussing in class the (shift) factors affecting demand for a product my example will be the following:
If the price of beef rises then demand for rat meat will rise and as a result shift to the right!
I was reading today's Kathimerini (English edition here) when the following caught my attention:
The price of rat meat has quadrupled in Cambodia this year as inflation has put other meat beyond the reach of poor people, officials said on Wednesday.
With consumer price inflation at 37 percent according to the latest central bank estimate, demand has pushed a kilogram of rat meat up to around 5,000 riel ($1.28) from 1,200 riel last year.
Spicy field rat dishes with garlic thrown in have become particularly popular at a time when beef costs 20,000 riel a kg.
Here is also a clear example that inflation is not balanced (i.e. if inflation is, say, 4.7% it does not mean that all prices increased by 4.7%).
Question: If the price of rats (per kg....) increased from 1200 riel to 5000 riel in a year and the price of beef is now 20000 riel (/kg.) how much was beef at the most last year (given that people are switching from beef to rats.
Also, what is the staple food in Cambodia? I read somewhere that it is white rice. For the very poor in Cambodia who are now forced to switch to rat meat, is there any chance that white rice may behave as a Giffen good? Yes? No? Why or why not?
Mind you that this news may sound strange to many but it hides some dramatic facts that maybe we should be aware of:
...malnutrition in children 6-59 months old continues to be a major problem in Cambodia based on the three commonly used indicators. The prevalence of underweight was 52%, that of stunting was 56% and 13% of children were wasted.If you are interested in finding out more about the nutrition profile of Cambodia read the summary of a FAO report here.
(the article in English about the rising demand for rat meat is found here.