Question

Inferior goods are those whose income effect is? a) negative b) positive c) zero d) none of these​

Answer 1

Answer:

option ," b is correct answer

Answer 2

Inferior goods are those whose income effect is negative. (Option a)

• Giffen commodities are those inferior items for which the price and quantity requested have a positive connection.
• Giffen items are of poor quality and have a large negative income effect.
• As a result, when the price of such commodities drops, so does demand, even though they are substantially less expensive than other things.
• The 'Giffen Paradox' is a well-known example of this.
• The effect of income is negative.