Praxis II Citizenship

Answer: B - An increase in the demand for diamond jewelry would likely lead to a derived demand for more diamond mining. A derived demand is a secondary demand for a factor of production needed to produce the primary demand. In order to make diamond jewelry, diamonds must be mined. Therefore, if the demand for diamond jewelry increases, the demand for diamond mining will likely increase. Stores selling diamond jewelry are not needed to meet the increased demand for getting the product to consumers; the new stores would be capitalizing on the opportunity of a growing market. The diamond demand may also increase the demand for related consumer cleaning products, but that would occur after the production and sale of diamond jewelry. It would not be necessary to facilitate the production or sale of diamond jewelry.