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JAMB Economics 1994 Question 19

Question 19

Theory of Demand

A demand which is positively related to price is true of

  1. A.normal goods
  2. B.giffen goods
  3. C.ostentatious goods
  4. D.capital goods
Show the answer and explanation

Answer: B (giffen goods)

Explanation

For a Giffen good, a rise in price leads to more being demanded, so demand moves in the same direction as price.