Which of the following most clearly illustrates the concept of "derived demand"?
a. An increase in the price of steak causes the demand for poultry to increase.
b. As the price of coffee increases, the quantity demanded for coffee declines.
c. A boom in the housing market leads to an increase in the demand for lumber and electricians.
d. An increase in beer advertising on television leads to an increase in per capita beer consumption.
C
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Which of the following would be included in Germany's GNP?
A) the production of BMWs (made by a German-based company) in South Carolina B) the production of Michelin tires made in Germany by a French company and then sold directly to French consumers C) the production of BMWs in Germany D) the production of Michelin tires made in France by a French company and then sold to BMW in Germany for use in BMW cars E) Answers A and C are correct.
If people like their goods in fixed proportions, the two goods are
a. perfect substitutes b. perfect complements c. complements (but not perfect) d. substitutes (but not perfect)