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Regarding Giffen goods, which statement is correct? a. Giffen goods are normal luxury goods. b. Giffen goods are caused by irrational preferences. c. Giffen goods
Regarding Giffen goods, which statement is correct?
a.
Giffen goods are normal luxury goods.
b.
Giffen goods are caused by irrational preferences.
c.
Giffen goods present perfectly inelastic demand.
d.
In the case of Giffen goods, the income effect of a price change reinforces the substitution effect.
e.
In the case of Giffen goods, the income effect of a price change eliminates the substitution effect and becomes dominant.
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