With Only Two Goods,if the Income Effect Is in the Opposite

question 30

Multiple Choice

With only two goods,if the income effect is in the opposite direction as the substitution effect but the substitution effect dominates then the good is

• A)normal
• B)inferior but not Giffen
• C)Giffen
• D)There is not enough information to answer.

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Definitions:

Base Salary

The initial salary paid to an employee, not including any benefits, bonuses, or increases.

Gross Pay

The total amount of money earned by an employee before any deductions or taxes are applied.

Hourly Rate

The financial remuneration allocated for every working hour.

Semimonthly

Occurring twice a month, typically describing how regularly payments are made or received.