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    Question

    What is the elasticity of income in the case of Giffen

    goods?
    A Positive Correct Answer Incorrect Answer
    B Lies between 0 and 1 Correct Answer Incorrect Answer
    C Negative Correct Answer Incorrect Answer
    D Not related to income level Correct Answer Incorrect Answer

    Solution

    Giffen goods are rare forms of inferior goods that have no cheaper close substitute or alternative such as bread, rice, and potatoes. The only difference from traditional inferior goods is that demand increases even when their price rises, regardless of a consumer's income.

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