Which of the following statements is false?
A) If the price of a good falls, the substitution effect will always induce the consumer to consume at least as much of the good as before the price change.
B) All Giffen good are inferior goods.
C) As the price of an inferior good increases, the income effect will induce the consumer to consume less of the good.
D) As the price of a normal good falls, the income effect will result in an increase in consumption of the good.

Question

Quizplus · Accepted Answer

For an inferior good, as the price increases, the income effect may actually lead to an increase in consumption, contrary to the statement.

Which of the Following Statements Is False