A Giffen good is a good for which: MCQ with Answer and Explanation

A Giffen good is a good for which:
A. income effect is zero
B. demand is perfectly elastic
C. demand falls when price falls
D. demand increases when price rises
Answer: Option D
Solution (By JKSSB Mock Tests)
A Giffen good has a strong income effect that dominates the substitution effect, so quantity demanded rises when price rises.

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Practice More Economy Set 1 Questions

Question #1
The concept of 'Social Opportunity Cost' is particularly relevant in the evaluation of:
A. Private investment projects only
B. Public investment projects
C. International trade only
D. Monetary policy only

Correct Answer: Option B


Explanation:
Social opportunity cost considers the true cost to society of using resources in a particular project and is especially important in the appraisal of public investment projects.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' on franchise services is:
A. 12%
B. 18%
C. 28%
D. 5%

Correct Answer: Option B


Explanation:
Franchise services attract 18% GST.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is an example of a positive externality?
A. Noise from a construction site
B. Vaccination by an individual
C. Congestion on roads
D. Pollution from a factory

Correct Answer: Option B


Explanation:
A positive externality confers benefits on third parties. Vaccination protects not only the individual but also reduces the spread of disease to others.

This question belongs to: Economy GK Economy Set 1