A Level Economics AQA Practice Exam

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Which term refers to goods that have more than one use?

Joint Demand
Composite Demand
Derived Demand
Elastic Demand

The correct answer is: Composite Demand

The term that refers to goods that have more than one use is composite demand. Composite demand occurs when a good is demanded for multiple different uses simultaneously. For example, water can be used for drinking, cooking, cleaning, and agriculture. When the demand for water increases for one particular use, it affects the availability and price for its other uses as well. Choosing composite demand highlights the interconnections between different uses of a product, emphasizing that increased demand for a good in one sector can lead to competition for that good in other sectors as well. This concept is important in understanding how resource allocation and pricing can be influenced by various sectors needing the same commodity. In contrast, the other terms reflect different economic concepts. Joint demand pertains to goods that are consumed together, derived demand refers to demand for a factor of production based on the demand for the goods produced, and elastic demand describes how quantity demanded responds to changes in price. These distinctions are crucial for analyzing market behaviors and consumer choices.