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Difficulty: MediumTypes of Demand

Match each economic scenario or commodity usage on the left with its corresponding classification of demand on the right.

  • Timber required by carpentry workshops to produce executive office desksDerived Demand
  • Crude oil demanded to refine petrol, diesel, kerosene, and aviation fuelComposite Demand
  • Butter and margarine serving as alternative choices to satisfy consumer needsCompetitive Demand
  • Printing ink and printing paper purchased together to publish physical newspapersJoint Demand

Answer

Timber -> Derived Demand; Crude oil -> Composite Demand; Butter and margarine -> Competitive Demand; Printing ink and paper -> Joint Demand.
Each commodity scenario correctly corresponds to its specific demand classification: derived demand applies to raw materials whose demand depends on final products; composite demand applies to single resources serving multiple uses; competitive demand applies to substitute goods; and joint demand applies to complementary goods consumed together.

Step-by-Step Solution

1
Classify the demand for timber used in making furniture
Timber demand is derived from the demand for the final output (furniture).
Derived demand occurs when an input or factor of production is demanded because of the demand for the final product it creates.
2
Classify the demand for crude oil used across multiple products
Crude oil has multiple alternative uses (petrol, diesel, aviation fuel), making its demand composite.
Composite demand refers to the total demand for a single commodity that serves several different uses.
3
Classify the demand relationship between butter and margarine
Butter and margarine are alternative substitutes, representing competitive demand.
Competitive demand exists between goods that can be substituted for one another to satisfy the same desire.
4
Classify the demand for printing ink and paper used together
Printing ink and paper are used jointly to print newspapers, representing joint (complementary) demand.
Joint demand occurs when two or more goods must be consumed or used together to satisfy a single want.

Key Concept

Classifications and economic definitions of interrelated types of demand (derived, composite, competitive, and joint demand).
Estimated Time:1m 0s
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Topics

Types of Demand

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