If income effect works in the same direction to that of substitution effect, the good is a:
A)Normal good
B)Inferior good
C)Giffen good
D)Superior Good

Question

Quizplus · Accepted Answer

When both the income effect and the substitution effect work in the same direction, it indicates a normal good. This means that as income increases, the demand for the good also increases, and vice versa.

If Income Effect Works in the Same Direction to That