Economist George Stigler once wrote that, according to consumer theory, "if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises." Explain this statement using the concepts of income and substitution effects.

Consumer theory is a cornerstone of microeconomics, explaining how individuals make choices about spending their available resources on various goods and services. At its core, it assumes that consumers are rational actors who aim to maximize their utility, or satisfaction, given their budget constraints.

From a theoretical standpoint, consumer behavior is influenced by changes in income and prices. Income changes affect purchasing power, leading to adjustments in consumption based on the income effect. Price changes, meanwhile, trigger the substitution effect as consumers seek alternatives offering better value. Understanding these impacts is key to unraveling complex consumer choices.

A normal good is a type of commodity that enjoys an increased consumption as the income of the consumer rises. This consumer reaction is rooted in the income effect, where a boost in income doesn't just bloat wallets but also encourages higher spending on these goods.

Examples range from organic food to holidays. Conversely, for inferior goods (the opposite of normal goods), consumption decreases as income climbs. As a content creator, it's important to clarify that a normal good can become an inferior good if a person's preferences significantly change, such as opting for public transport over a car post a substantial salary increase.

Price elasticity of demand is a measure that captures the responsiveness of the quantity demanded of a good to a change in its price. In simpler terms, it shows how much the demand for a product will stretch or shrink when the price goes up or down.

This economic tool is critical when understanding the consumer theory, where goods with higher elasticity have consumers quickly switching to alternatives with a price rise (reflecting a strong substitution effect), while goods with low elasticity (like many necessities) see little change in demand when prices fluctuate. It's essential to emphasize that this concept encapsulates the crux of market dynamics, predicting how consumers will react to pricing strategies.

Consumption patterns represent the overall picture of how consumers allocate their spending among various goods and services. It's a map charting out aggregated individual choices, often influenced by a medley of factors like income levels, tastes, trends, and price changes.

By examining consumption patterns, we can detect shifts in preferences and the economic health of a population. They provide valuable insights into how consumption responds to economic stimuli, say, a recession or a tech boom. For students, understanding these patterns not only aids in grappling with consumer theory but also paints a broader economic landscape.