Good X Is an Inferior Good but Not a Giffen

question 533

Multiple Choice

Good X is an inferior good but not a Giffen good. When the price of X increases, the consumer will consume

• A)more X.
• B)the same amount of X.
• C)less X.
• D)more or less X depending on the size of the income effect relative to the size of the substitution effect.

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Definitions:

Cash Sales

Transactions where payment is received by the seller at the same time the buyer receives the goods or services.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Credit Sales

Transactions where goods or services are sold by a business but payment is received at a later date.

Cash Sales

Transactions in which payment for goods or services is made at the time of sale, typically in cash form.