If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such goods are called:
If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such goods are called:
Solution
✅ Correct Option: 1
When the negative income effect of a price change dominates the substitution effect, quantity demanded moves in the same direction as price. This exceptional case is called a Giffen good.
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