Assume that you have two goods: beverage (y-axis) and food (x-axis), graphically illustrate the income and...

Assume that you have two goods: beverage (y-axis) and food (x-axis), graphically illustrate the income and substitution effects of a price decline in food for a normal good. Note a point on the new indifference curve (after the change) that could represent an inferior good and Giffen good respectively. What is a Giffen good and what are its implications?

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Rahul Sunny answered 2 years ago

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