The interrelationship between markets

Question 1

what is Derived demand

Answer 1

This is when the demand for one good is linked to the demand for a related good.

Question 2

an example of derived demand

Answer 2

For example, the demand for bricks is derived from the demand for the building of new houses. The demand for labour is derived from the goods the
labour produces.

Question 3

what is Composite demand

Answer 3

This is when the good demanded has more than one use

Question 4

an example of composite demand

Answer 4

An example could be milk. Assuming there is a fixed supply of milk, an increase in the
demand for cheese will mean that more cheese is supplied, and therefore less butter can be supplied.

Question 5

what is Joint demand

Answer 5

This is when goods are bought together

Question 6

an example of joint demand

Answer 6

such as a digital camera and
a memory card. An increase in demand for digital cameras is likely to lead to an
increase in demand for memory cards.

Question 7

what is Joint supply

Answer 7

This is when increasing the supply of one good causes an increase or decrease in the supply of another good

Question 8

an example of joint supply

Answer 8

For example, producing more lamb will
increase the supply of wool.