If Cigars and Cigarettes Are Substitute Goods, an Increase in the Price

question 492

Multiple Choice

If cigars and cigarettes are substitute goods, an increase in the price of cigars would result in

• A) an increase in the demand for cigarettes.
• B) a decrease in the price of cigarettes.
• C) a decrease in the demand for cigarettes.
• D) a decrease in the demand for cigars.

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Definitions:

Consumer Good

A product or commodity that is produced and purchased to satisfy the personal or family needs of the consumer.

Secured Interest

A legal claim or lien on assets or property, granted to a lender as security for the repayment of a debt, giving the lender rights to the collateral if the debt is not repaid.

Commercially Reasonable

A standard in law and business that measures actions against what a reasonable person engaged in commerce would believe is acceptable or customary practice.

Repossessed Vehicle

A vehicle taken back by a lender or seller from the buyer due to failure to make agreed payments.