If the Demand for Used Cars Decreases After the Price

question 96

Multiple Choice

If the demand for used cars decreases after the price of a new car falls,used cars and new cars are

• A) inferior goods.
• B) substitute goods.
• C) complementary goods.
• D) normal goods.
• E) The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.

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Definitions:

Positive Variance

The difference between actual performance and expected performance where the actual outcome is more favorable than what was anticipated.

Weights

In finance, it refers to the proportion of each component's value in a portfolio or in a weighted average calculation.

Expected Return

The probable return on an investment, taking into account all possible outcomes or the aggregate return that an investor anticipates over a certain period.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk or un-diversifiable risk.