Which of the following statements is FALSE?
A) A Giffen good must be an inferior good.
B) A Giffen good must be such that the income effect and the substitution effect move in opposite directions, and the income effect outweighs the substitution effect.
C) A Giffen good must be such that the substitution effect outweighs the income effect for an inferior good.
D) A Giffen good must have an upward-sloping demand curve.

Question

Quizplus · Accepted Answer

A Giffen good is characterized by the income effect outweighing the substitution effect, not the other way around, which is why the demand curve slopes upward.

Which of the Following Statements Is FALSE