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    Question

    If positive income effect is less than the substitution

    effect: the product will be
    A A normal good Correct Answer Incorrect Answer
    B An inferior good Correct Answer Incorrect Answer
    C A giffen good Correct Answer Incorrect Answer
    D A complementary good Correct Answer Incorrect Answer

    Solution

    Price effect = substitution effect + Income effect. If positive income effect is less than substitution effect then price effect will be negative. So, the product will be inferior good.

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