Indifference curves and budget lines — practice question

When the price of a good decreases, the total change in quantity demanded can be divided into income and substitution effects. Which statement best describes a Giffen good?

• AThe income effect is irrelevant for a Giffen good.
• BThe income effect works in the same direction as the substitution effect.
• CThe income effect works against the substitution effect and is of a greater magnitude.
• DThe income effect works against the substitution effect but is of a smaller magnitude.