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

Indifference curves and budget lines — practice question

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

  • AGiffen, price change: fall, demand change from substitution effect: positive, demand change from income effect: negative
  • BGiffen, price change: rise, demand change from substitution effect: positive, demand change from income effect: positive
  • Cinferior, price change: fall, demand change from substitution effect: negative, demand change from income effect: negative
  • Dinferior, price change: rise, demand change from substitution effect: negative, demand change from income effect: negative

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