question archive Because the demand for labor is a function of the demand for the goods produced by the labor, labor demand is referred to as: a) A derived demand, b) A complementary demand, c) A perfectly elastic demand, d) An aggregate demand, e) An investment demand

Because the demand for labor is a function of the demand for the goods produced by the labor, labor demand is referred to as: a) A derived demand, b) A complementary demand, c) A perfectly elastic demand, d) An aggregate demand, e) An investment demand

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Because the demand for labor is a function of the demand for the goods produced by the labor, labor demand is referred to as:

a) A derived demand,

b) A complementary demand,

c) A perfectly elastic demand,

d) An aggregate demand,

e) An investment demand.

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The answer is a).

A direct demand occurs when there is desire from consumers to purchase the good for direct consumption. For example, a consumer's desire to purchase apples is a direct demand. A derived demand occurs when consumers do not directly consume the good, but consume other goods that are produced using the referenced good. In this question, the demand for labor is derived demand, because consumers have desire to consume goods produced by labor, not to consume labor directly.