Which of the Following Is Not an Example of Derived

question 104

Multiple Choice

Which of the following is not an example of derived demand?

• A)As more high school graduates go on to college, more professors are hired.
• B)As consumers buy more computers, they demand more powerful computers as they become available.
• C)As people let their hair grow longer, fewer people become barbers.
• D)As people buy more tennis shoes instead of sandals, they buy more shoe laces.
• E)Increased demand for overnight delivery speeds up orders for new delivery trucks.

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Definitions:

Merchandise Inventories

The total value of a company’s products currently available for sale, held by the business as assets.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Bonds Payable

Long-term debt instruments issued by a company to raise capital, with the promise to pay back with interest at a future date.