Question

Giffen goods are those goods in which case



a.Substitution effect is larger than income effect



b.Income effect and substitution effect work in the same direction



c.The negative income effect is larger than the substitution effect



d.Income effect is positive, but substitution effect is negative

Answer 1

Heya...

See here for your answer...

Giffen goods are highly cheaper goods ...

So, Option C is the answer...

√ In case of Giffen goods income effect is largely greater than the substitution effect...

√ It causes the failure of law of demand in this case...

Thank you...

Answer 2

QUESTIONS:-

Giffen goods are those goods in which case

a.Substitution effect is larger than income effect

b.Income effect and substitution effect work in the same direction

c.The negative income effect is larger than the substitution effect

d.Income effect is positive, but substitution effect is negative

ANSWER:-

c.The negative income effect is larger than the substitution effect


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