A Level Economics AQA Practice Exam

What does joint supply refer to in economics?

1. The production of two goods that can be produced independently

2. The production of two or more goods derived from a single product

3. The process of creating goods and services

4. The allocation of resources among multiple products

The correct answer is: The production of two or more goods derived from a single product

Joint supply refers specifically to the production of two or more goods derived from a single product. This concept is often illustrated with examples such as beef and leather, where the slaughtering of cattle produces both meat and leather. Since both goods share a common input (the cattle), they are produced together; the production of one good inherently involves the production of the other. This is distinct from the other concepts presented. The option describing independent production would focus on goods that do not rely on each other for their output, which is not applicable in the case of joint supply. The general process of creating goods and services captures a broader economic activity that doesn't specify the relationship between the produced items. Lastly, the allocation of resources speaks to how resources might be distributed among various products without addressing the particular relationships inherent in joint supply situations. Thus, the correct answer emphasizes the interconnected nature of jointly supplied goods, wherein the production of one directly affects the availability and supply of another.