Giffen Paradox occurs when income effect is:

CA Foundation · Business Economics · MTP · September 2025
Giffen Paradox occurs when income effect is:
(A) A. Greater than the substitution effect
(B) B. Equal to the substitution effect
(C) C. Less than substitution effect
(D) D. Negative and is greater than substitution effect

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Negative and is greater than substitution effect

Topics: Theory of Demand and Supply

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