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New Cars Are Normal Goods

Question 104

Multiple Choice

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?


A) Price will rise.
B) Price will fall.
C) Price will stay exactly the same.
D) The price change will be ambiguous.

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