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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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