A New Car Is Typically Considered to Be a Normal

question 135

Multiple Choice

A new car is typically considered to be a normal good.What would happen to the equilibrium price and quantity of new cars if there is a recession where many people lose their jobs?

• A) The equilibrium price would rise and the equilibrium price would fall as demand shifts to the left.
• B) The equilibrium price and quantity would both fall as demand shifts to the left.
• C) The equilibrium price and quantity would both rise as demand shifts to the right.
• D) The equilibrium price would fall and the equilibrium quantity would rise as demand shifts to the right.
• E) There would be no change to the equilibrium price or quantity.

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Definitions:

Preferential Payment

A payment made to a creditor before bankruptcy that unfairly prioritizes that creditor over others, which can be reclaimed by the bankruptcy trustee.

Jewelry Store

A retail business establishment specializing in the sale of jewelry, including necklaces, rings, earrings, and bracelets, often offering repair services as well.

Bankruptcy Petition

A formal request filed in court by a debtor seeking relief from unmanageable debts, initiating bankruptcy proceedings.

Consumer Good

A good used or bought for use primarily for personal, family, or household purposes.