Which of the following is NOT an example of derived demand? “The demand for…
a. “…petroleum is based, to a great extent, upon the demand for gasoline.”
b. “…nurses is based, in general, upon the overall demand for health-care services.”
c. “…eyeglass lenses is based, to a great extent, upon the demand for eyeglasses.”
d. “…gasoline is based, to a great extent, upon national income.”
Ans.: d)gasoline is based, to a great extent, upon national income is not an example of derived demand.
When the demand of one commodity creates the demand for another commodity then it is derived demand. And the demand for gasoline and national income doesn't create demand for easch other so it's not the example of derived demand.
In the rest of examples- a) if the demand for gasoline increase then the demand for petroleum definitely increase as the gasoline is made up from petroleum so it is the example of derive demand. b) Same with the example of nurses and health care services because the increase in demand for health care services will increase the demand for nurses so it is also an example of derived demand. c) As well as demand fore eyeglasses increase demand for eyeglass lenses so it is also example of derived demand.
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