Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 21 - Part VII - The Theory of Consumer Choice - Quick Check Multiple Choice - Page 458: 5

Answer

c) pasta is an inferior good, and the income effect is greater than the substitution effect.

Work Step by Step

With the price rising for a good (and the amount bought increasing), we have a Giffen good. The good of Giffen is an inferior good. As a result of the income effect, our purchasing power has reduced. Under the substitution rule, we 're having less bits of pasta for any other good we 're giving up.
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