Which of the Following Best Illustrates the Concept of Derived

question 52

Multiple Choice

Which of the following best illustrates the concept of derived demand?

• A) An increase in the price of gasoline leads to an increase in the demand for small cars.
• B) An increase in the wages of autoworkers leads to an increase in the demand for robots in automobile factories.
• C) An auto firm decides to supply more minivans when there is a decrease in the demand for station wagons.
• D) An automobile firm faces an increase in the demand for cars it supplies to the market, which leads to an increase in the demand for autoworkers.

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Definitions:

Sway Bar Link

A component of a vehicle's suspension system that connects the sway bar to the suspension to help reduce body roll during turns.

Ball Joint

A pivot point for the steering system, allowing the wheels to move up and down while steering left or right.

CV Joint

Short for Constant Velocity Joint, it allows a drive shaft to transmit power through a variable angle at constant rotational speed without significant loss of torque.

Steering Knuckles

Components in a vehicle's suspension system that connect the wheel to the axle, allowing for steering movements.