Which statement is FALSE?
A)A Giffin good must be an inferior good.
B)A Giffin good must be such that the income effect and the substitution effect move in opposite directions,and the income effect outweighs the substitution effect.
C)A Giffin good must be such that the substitution effect outweighs the income effect for an inferior good.
D)A Giffin good must have an upward-sloping demand curve.

Question

Quizplus · Accepted Answer

A Giffin good does not necessarily have to be an inferior good, as it only requires that the income effect and substitution effect move in opposite directions, with the income effect outweighing the substitution effect. Option A, B, and D are all true statements about Giffin goods.

Which Statement Is FALSE