Income and Substitution Effect

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<h3>Normal Good&colon; <&sol;h3>&NewLine;<p> If consumption of that god increase due to a decrease in it price than it is a normal Good&period; <&sol;p>&NewLine;<h3>Inferior Good&colon; <&sol;h3>&NewLine;<p> A good is inferior if there is a decrease in the consumption of that good&period; This means that the income effect is negative&period; <&sol;p>&NewLine;<h3>Giffen Good&colon; The Special Case<&sol;h3>&NewLine;<p> These are good whose demand curve slopes upward because the &lpar;negative &rpar; income effect is larger than the substitution effect&period; if incase one good becomes inferior than you tend to buy more of the other good which leads to an upward sloping demand curve&period; This also means that one good decrease in price leads to a lower quantity demanded for it&period; &NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;