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Coarse grains such as bajra and low quality rice, which are inferior, have no close substitutes, and occupy a large share of the budget, are classic examples of which exception to the law of demand?
AConspicuous goods
BGiffen goods
CSpeculative goods
DConspicuous necessities
Answer & Solution
Correct answer: B. Giffen goods
1. Giffen goods are inferior goods with no close substitutes that take a large share of the budget.
2. When their price rises, real purchasing power falls so much that buyers buy more of them.
3. Examples given are coarse grains like bajra and low quality rice.
4. Hence these are Giffen goods.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit I "Law of Demand and Elasticity of Demand", p.11_
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