Question

After graduation many students' demand for used cars decreases. This may be because used cars are considered a normal good to college graduates. False True

Answer 1

The statement is: False.

Step-by-step explanation:

Normal goods are those with increasing demand as a result of increases in consumer wages. Examples of normal goods are food staples or clothing. On the other hand, inferior goods are those with decreasing demand when people's income rise. Bus travels and corned beef are examples of inferior goods.

Thus, used cars are considered inferior goods to college students since after graduation, when they start working and earning an income, they are likely to stop purchasing used cars to buy brand new vehicles.