With only two goods,if the income effect is in the opposite direction as the substitution effect but the income effect dominates 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

A Giffen good is characterized by an upward-sloping demand curve, which occurs when the income effect of a price increase for a good dominates the substitution effect and is in the opposite direction, leading to an increase in the quantity demanded despite the increase in price. This scenario describes a Giffen good.

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