If income effect works in the direction opposite to that of substitution effect, the good is not:
A)Giffen good
B)Inferior good
C)Normal good
D)Superior Good

Question

Quizplus · Accepted Answer

When the income effect works in the opposite direction to the substitution effect, it indicates that as income increases, the demand for the good decreases, which is characteristic of inferior goods, not normal goods. Normal goods see an increase in demand as income increases.

If Income Effect Works in the Direction Opposite to That