Question

in cash of giffen goods income effect is higher than the subsitution effect​

Answer 1

Answer:

At the same time, the price reduction increases consumer purchasing power, known as the income effect (an outward shift of the budget constraint). ... Any good where the income effect more than compensates for the substitution effect is a Giffen good.

As we noted, the demand for rice rose from 40 kg to 43 kg despite its increase in price. Therefore, rice is an example of a Giffen good.