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:

Stock Dividend

A payment of additional shares of stock to shareholders instead of cash.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of an entity.

Declaration

An official statement, announcement, or acknowledgment made by an authority.

Comparative Statement

A financial analysis tool that compares two or more financial statements to identify trends or changes over a period.