Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

The quantity of a good that the consumer chooses can increase or decrease with the rise in the price of a related goods depending on whether the two goods are substitutes or complementary to each other. Goods which are consumer together are called complementary goods. Examples of goods which are complement to each other include tea and sugar, shoes and shocks, pen and ink, etc, Since tea and sugar are used together, an increase in the price of sugar is likely to decrease the demand for tea and decrease in the price of sugar is likely to increase the demand for tea. Similar is the case wit other complements. In general, the demand for a good moves in the opposite direction of the price of its complementary good.

Car and petrol are the example of _____________ goods.

Options:

Normal goods

Inferior goods

Substitute goods

Complementary goods

Correct Answer:

Complementary goods

Explanation:

The correct answer is option (4) : Complementary goods

This is because cars and petrol are typically used together. An increase in the demand for cars is often associated with an increase in the demand for petrol, and vice versa.