Which of the Following Best Illustrates the Concept of "Derived

question 142

Multiple Choice

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

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

Express Terms

Specific conditions and obligations explicitly stated and agreed upon by the parties in a contract.

Non Est Factum

A defense in contract law that the person signing the document did not understand its nature due to a significant mistake.

Duress

A situation where a person is forced into an action or decision under threat of harm or coercion.

Obligation

A duty or commitment imposed by law, contract, or moral duty.