A Friend Says, "I Really, Really Need a New Car

question 316

Multiple Choice

A friend says, "I really, really need a new car." As an economist, you're thinking

• A) Right! Everyone needs a new car.
• B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car.
• C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want.
• D) that a new car can only be considered a need if at least 51% of the public agrees.

Recognize different levels of product competition and their implications in market analysis.

Apply concepts of cross-elasticity to understand product substitutability.

Distinguish between different methods of market definition (demand-side vs. supply-side).

Explain the importance of considering substitute products in market analysis.

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Definitions:

Electroconvulsive Therapy

A medical treatment most commonly used for severe depression that involves electrically induced seizures.

General Anesthetic

A drug or agent used to induce loss of consciousness, sensation, and reflexes during surgical procedures.

Muscle Relaxant

A medication or drug that reduces muscle tension and is used in the treatment of muscular spasms and pain.

Therapeutic Life-style

Lifestyle modifications or interventions designed to improve overall health and well-being, often used to support mental health treatment.