For the special case of a Giffen good, the partial derivative of quantity demand

Question

For the special case of a Giffen good, the partial derivative of quantity demanded with respect to price is and the partial derivative of quantity demanded with respect to income is positive; positive positive; negative negative; positive negative; negative Which of the following statements about a Giffen good is FALSE? It is very rare. Its demand curve slopes upward The consumer buys a lot of an inferior good, and consumption of the good is very responsive to changes in income. The substitution effect dominates the income effect.

Explanation / Answer

1)Giffen good- Those good which has positive relation between price and quantity demanded, ceteris pribus.Thus partial derievative with respect to price is positive

All giffen good are inferior good which says as inverse relation between income and quantity demand. Thus partial derievative with income will be negative.

Thus ans is B

2)ans is D

Income effect dominates substitution effect in case of giffen good.

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