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:

Drop-in-the-bucket Problem

A metaphorical expression indicating a situation where the effort or resources are too insignificant to make a noticeable difference in a larger context.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by everyone and one person's use doesn't reduce availability to others.

Common Resource

A resource like air or water that offers users tangible benefits but is difficult to exclude non-payers from using, often leading to overuse.

Common Resource

A type of good that is non-excludable and rivalrous, such as air or a fishing area, leading to potential overuse or depletion.