With only two goods,if the income effect is in the same direction as the substitution effect then the good is
A)normal
B)inferior but not Giffen
C)Giffen
D)There is not enough information to answer.

Question

Quizplus · Accepted Answer

If the income effect is in the same direction as the substitution effect, it means that as the price of the good decreases, the consumer purchases more of it due to both effects. This behavior is consistent with a normal good, as lower prices lead to an increase in demand.

With Only Two Goods,if the Income Effect Is in the Same