Which of the following is not an example of derived demand?
a. As more high school graduates go on to college, more professors are hired.
b. As consumers buy more computers, they demand more powerful computers as they become available.
c. As people let their hair grow longer, fewer people become barbers.
d. As people buy more tennis shoes instead of sandals, they buy more shoe laces.
e. Increased demand for overnight delivery speeds up orders for new delivery trucks.
Question 2
If the marginal social benefit of consuming a product exceeds the marginal social cost of producing it, social welfare is
a. increased by reducing output
b. decreased by expanding output
c. unchanged by expanding or reducing output
d. increased by expanding output
e. maximized
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