CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The demand function for good X is Qx= 30 - 4.5 x Px + 0.1 x I. X is most likely to be a ______.
A. normal good
B. Veblen good
C. Giffen good
Explanation: The -4.5 indicates the higher its own price, the less it is consumed. Therefore, it is not a Veblen good.

The 0.1 indicates the higher the income, the more the good is consumed. Therefore, it is not a Giffen good.

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