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.

---

Definitions:

Management Responsibility

The obligation of organization leaders to make decisions, direct operations, and ensure the achievement of organizational goals.

Equity Investment

Refers to the purchase of shares of stock in a company, representing ownership interest or stake in that company.

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels of government, such as corporate profits taxed both at the corporate level and again as shareholder dividends.

Capital Budgeting Decision

The process of planning and assessing the potential profitability and risks of an investment or expenditure.