If Ramen Is a Giffen Good and the Price of Ramen

question 251

Multiple Choice

If ramen is a Giffen good and the price of ramen decreases:

• A) the substitution effect will cause a decrease in the consumption of ramen.
• B) the income effect will cause a decrease in the consumption of ramen.
• C) the income effect will reinforce the substitution effect, and the consumption of ramen will decrease.
• D) the demand curve for ramen will still be downward-sloping.

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Definitions:

Accounting Procedures

Systematic methods or processes followed in the preparation, maintenance, and auditing of financial records and statements.