BECO Post Course Assessment Practice Test

Goods that can be used for the same purpose are referred to as substitutes. This term describes products that fulfill similar needs or desires for consumers, allowing them to replace one another in consumption when the price or availability changes. For example, if the price of butter increases, consumers may choose to buy margarine instead, demonstrating how one product can substitute for another. Understanding substitutes is important in analyzing consumer behavior and market dynamics, as changes in the demand or supply of one product can significantly impact the market for its substitutes.

The other terms do not capture this specific relationship between goods. Complementary goods refer to items that are used together, while interchangeable goods is not a widely recognized term in economics. Differentiated products relate to how products are distinguished from one another in a market, rather than their ability to serve the same function.