Economics 9708 · AS & A Level · Indifference curves and budget lines

Indifference curves and budget lines — practice question

The table presents the substitution effect and the income effect for a Giffen good and an inferior good when the price of the good changes. Which combination is correct?

  • Atype of good: Giffen; price change: fall; demand change from substitution effect: positive; demand change from income effect: negative
  • Btype of good: Giffen; price change: rise; demand change from substitution effect: positive; demand change from income effect: positive
  • Ctype of good: inferior; price change: fall; demand change from substitution effect: negative; demand change from income effect: negative
  • Dtype of good: inferior; price change: rise; demand change from substitution effect: negative; demand change from income effect: negative

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